You have worked hard and sacrificed a lot to build your business, but have you considered if and how you can achieve financial independence when you exit?

Stephen Adair, chartered financial planner and co-founder of Broad Chare Partners, explains the importance of working out your ‘financial freedom figure’ as the very first step in your exit planning strategy.

How much?

According to the trade association, a single person will need £10,900 a year to achieve the minimum living standard, £20,800 a year for moderate, and £33,600 a year for comfortable. For couples it is £16,700, £30,600 and £49,700. 

The minimum living standard covers most people’s basic needs plus enough for some fun – including participation in social occasions. For example, you could holiday in the UK, eat out about once a month and do some affordable leisure activities about twice a week.

The moderate lifestyle provides, in addition to the minimum lifestyle, more financial security and more flexibility. For example, you could have a two-week holiday in Europe and eat out a few times a month.

At the comfortable level, retirees could enjoy some luxuries like regular beauty treatments, theatre trips and three weeks in Europe a year.

By giving business owners a general figure, they can then start to develop their own personal targets based on their individual circumstances and aspirations. Using cashflow modelling and forecasting, we can help to develop this to generate your realistic ‘financial freedom figure’ and put plans in plans to maximise the value of your business.

Which exit strategy is right for you?

When you know how much you need to retire and are confident that your business can monetise this, there are several exit strategies to consider, each with different benefits and timescales. Find out which strategy could be right for you by viewing our series of bite-size webinars:

Your Exit Plan: Trade Sale – Click here to access the recording

or by joining us: 

Your Exit Plan: Management Buy-Out (Thursday 6^th April, 9:30AM – 10:00AM) – Click here to register

Your Exit Plan: Employee Ownership Trust (Friday 19^th May, 10:00AM-10:30AM) – Click here to register

Your Exit Plan: Private Equity (Friday 22^nd September, 10:00AM – 10:30AM) – Click here to register

Seek expert advice

Selling your business is a great achievement and you might realise substantial rewards. However, after years of paying yourself from your business, it requires careful investment planning to achieve your goals and aim to realise the life you want for you and your family.

Broad Chare Partners provides guidance on the tax considerations and offers advice on your future to help build and protect your hard-earned assets from inflation and HMRC.

Get it touch here

Broad Chare Partners is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website

Broad Chare Partners is a trading name of Broad Chare Partnership LLP.

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