For business owners
What happens to your business when you stop?
Most owners' retirement plans rest on an asset nobody has valued, that may not be saleable, and that often can't run without them. Worth finding out early.
Most owners' retirement plans rest on an asset nobody has valued, that may not be saleable, and that often can't run without them. Worth finding out early.
Ask an owner what they're worth and the business usually appears in the answer with a confident round number attached. Ask where the number came from and it's rarely anywhere.
That matters because for a lot of owners the business is the single biggest item in the plan — often larger than the pensions and the house together. If it's worth what they think, they're fine. If it's worth nothing, the plan fails. And nobody has checked which.
Every plan models the business twice: once at zero, once at your figure. The gap between those two answers is the honest measure of how much of your retirement rests on a sale. For plenty of owners that gap is most of the plan, and seeing it is the most useful thing the exercise does.
The one everybody pictures. Depends entirely on whether the business runs without you — a firm that is really one person with a company around them is a job, not an asset, and buyers know it.
Often more achievable, usually at a lower price, frequently paid over time out of future profits. That changes your plan considerably: it's an income stream with risk attached, not a lump sum.
Step back, keep ownership, take dividends. Works well for some businesses and not at all for others, and depends on somebody competent running it who isn't you.
The unglamorous ending, and more common than anyone admits. Extract what's there, close it, walk away. Worth modelling honestly, because it's the floor.
Not the thing most owners think. Turnover and even profit matter less than whether it survives your absence.
The single biggest factor. If the relationships, the quoting and the decisions all live in your head, a buyer isn't purchasing a business — they're purchasing your obligation to keep turning up.
Contracts, retainers and recurring work are worth far more per pound than one-off jobs, because the buyer can see next year.
Accounts a buyer can believe without a forensic exercise. This is where being an accounting client actually pays — a business with three years of tidy, consistent numbers is materially easier to sell.
One customer at 60% of turnover, or one supplier, or one person who knows the system. Each one reduces the price or kills the sale.
Making a business saleable takes two to three years. If you want to stop at 62 and it's 60 now, the window for changing anything has largely closed. This is the argument for modelling it at 50 rather than 60.
A business sale isn't just a number to add on. It changes the shape of the plan in three ways.
Sales fall through, take longer than expected, or complete in a bad year. A plan that needs the money at 61 exactly is fragile in a way a pension isn't.
How you extract value from a company at the end has significant tax consequences, and the numbers involved are usually large. This is properly your accountant's territory and it belongs in the plan.
Money paid over three or five years out of future profits carries the risk that the profits don't appear. It should be modelled as what it is, not as cash on day one.
Stopping usually cuts spending too — the car, the travel, the things the business was quietly paying for. Worth modelling honestly rather than assuming the same outgoings forever.
If the projection says the business matters and it currently is not saleable, the work has a shape and it takes about three years. None of it is financial planning; all of it changes the number.
Write down every decision only you can make and every relationship only you hold. That list is the price a buyer would discount. Start handing pieces of it over, badly at first, and accept that things will be done differently rather than wrongly.
Clean, consistent management accounts, personal costs out of the company, revenue split so a buyer can see what recurs. A business with three tidy years behind it survives due diligence. One with three years of surprises loses value at exactly the moment it cannot be argued about.
One customer at 60% of turnover, one supplier with no alternative, one person who understands the system. Each one either takes money off the price or gives a buyer a reason to walk, and each takes months rather than weeks to fix.
Take a genuine month away from the business without being contactable. What breaks in that month is what a buyer is really pricing. It is the cheapest piece of diligence available and almost nobody does it before they need to.
Three years of that work is a serious commitment, and it is only worth making if the business genuinely is load-bearing in the plan. That is exactly what modelling it at zero tells you. Some owners run the projection, find the plan holds up without a sale, and decide to keep the business as it is and enjoy it. That is a perfectly good outcome and it takes the pressure off the exit entirely.
Get it valued by somebody who does that for a living, and do it several years earlier than feels necessary. It costs a few hundred pounds and it puts a real figure against something that might be half your retirement plan, which makes it one of the better-value pieces of work available to an owner. Expect the answer to be a range rather than a number, and expect it to depend heavily on how much of the business walks out of the door with you. In the meantime, model it at zero and find out whether the plan still stands up without it. That answer on its own tells you how urgent the valuation actually is.
For a great many owners it is, in practice, whether or not they would put it that way. That means the bulk of the retirement rests on a single illiquid asset, in one industry, whose value depends on finding one specific buyer at one specific moment. It is not automatically the wrong choice, and for plenty of owners the business has genuinely been the best home for the money. What it should be is a decision somebody made deliberately rather than a default nobody examined. Running the projection with the business at zero and again at your figure makes the concentration visible, and for most owners that is the first time they have seen it set out.
It is a genuine question with real tax consequences on both sides, and the moment it becomes which pension, which fund and how much, it is regulated advice that Buzz is not authorised to give. What we can do is model both routes side by side in your own numbers, so you can see what each does to the age your money runs out and to how much of the plan depends on a sale. The extraction and corporation tax side of it is properly a conversation with your accountant, who can tell you what a given approach costs the company. Seeing the retirement effect and the tax effect together is usually what makes the decision obvious.
Then the honest version of the plan is the wind-down one, and it is far better to establish that at 52 than at 62. Plenty of perfectly good businesses provide an excellent living for decades and carry no exit value at all, particularly where the work is genuinely the owner doing the work. That is not a failure and it does not mean anything has been done wrong. What it does mean is that the retirement has to be funded from somewhere else, and knowing it early is what makes funding it possible. It also changes what you should be doing with profits now, which is a conversation worth having while there is still time.
It covers what a sale at various values does to your position, when you would need the money to arrive, and how badly the plan suffers if it arrives late, arrives smaller, or does not arrive at all. Deferred consideration paid out of future profits gets modelled as what it is rather than as cash on completion day. The mechanics of actually selling, meaning the valuation, the deal structure, the warranties and the tax on extraction, are your accountant's and your solicitor's work rather than ours. What we make sure of is that the retirement built around the sale is real.
The projection runs in your browser in about a minute. Nothing is sent anywhere and no email is needed to see the answer.
Thirty minutes with a planner to work out whether you need a Plan at all. Some people leave that call having been told they don't.
One written document — every year to 100 with the tax done properly, what breaks it priced in years, and the ninety days after. £1,500.