Follow Dallas Linkedin
Email Dallas Email
Business Growth
Nov 18, 2015

Either You Have It, Or You Don’t

Sponsored Content provided by Dallas Romanowski - Managing Partner, Cornerstone Business Advisors

Business owners who are planning for successful futures should always begin by identifying and understanding their primary objectives for themselves, their families, their ownership and their businesses. Key objectives include:

  • The date you wish to exit;
  • The amount of cash you want upon exit; and
  • Your choice of successor.
For this coaching tip, let’s look carefully at that second objective: How much cash must your ownership of the business deliver to enjoy a financially secure post-business life? For most owners this is a great starting point for determining when, or if, they can leave their businesses on their own timeline and on their own terms.
The Issues
Joan D. was the 58-year old owner of Oleander Data Analytics, Inc. She had engaged her financial adviser to:
  • Set a realistic assumption for a rate of return on her investments;
  • Research actuarial information to determine average life expectancies for both she and her spouse; and
  • Help her and her spouse agree on and establish an acceptable post-exit annual income amount.
As part of this process, Joan and her adviser reached the critical question, the answer to which would determine Joan’s ability to retire on her terms: What must the value of Joan’s business be if Joan is to leave, as she desires, at age 63?
Like Joan, your resources are likely in the business and outside of it. You need to know the value of both so you can determine if there is a gap between the amount of money you will need in the future and the amount you have today. If you have enough to secure your financial future, your planning will go in one direction. If you don’t have enough for complete financial freedom, your planning will go in another direction. Both scenarios are fine, but you’ll want to know which one fits your situation. Any gap must be quantified, and to exit successfully you must create and implement strategies to close that gap. Most owners retain an experienced financial planner to help with this project.
The Process
Joan and her adviser used the following process:
  • First: Joan and her spouse agreed on their future annual income needs.
  • Second: Joan and her adviser, using their agreed-upon estimate of a projected rate of return, calculated how much Joan’s non-business investment assets would be worth at Joan’s desired exit date.
  • Third: Joan’s adviser calculated the amount of investment capital needed to pay Joan and her spouse the target income each year for the duration of their lives (based upon current actuarial tables and assumed reasonable, maybe even conservative, investment returns). This amount needed to be net of taxes, since Joan intended to use it for spending.
The Bottom Line
When the business falls short of the value needed to achieve your financial targets, you should consider working with a business coach to build business value that achieves your goals. When the business value meets your needs, you turn your attention to other goals and objectives, such as taking care of loyal employees, leaving a legacy in your industry and your community, and answering the “What’s next?” question. You either have it or you don’t. Keep in mind that neither circumstance eliminates the need for planning.
Contact our firm for help in organizing the right advisers to determine your business’s current value and the gap (if any) between what you have today and what you’ll need in order to exit on your terms. We can help you to understand your ultimate objectives and what you must have (and must do) to reach them.
The Cornerstone team includes former C-Level executives, successful entrepreneurs and advisors who offer unmatched experience in delivering advanced, custom-tailored, results-oriented solutions for business leaders. As a member of the Business Enterprise Institute (BEI), Cornerstone is an authorized distributor of BEI’s content and Exit Planning Tools. We developed the Performance Culture System™ to help clients implement best practices and drive high performance throughout their organization. For more information, visit, call 910-681-1420, or email [email protected].

Other Posts from Dallas Romanowski

Ico insights



Dram Shop Cases & Underage Purchasers: What NC Business Owners Should Know

Chris Hinnant - Barnwell Whaley Patterson & Helms, PLLC
Webilm julieformal kellystarbuckcom mg 5471

3 Ways Nonstop Air Service Grows Business

Julie Wilsey - Wilmington International Airport
Volety 0020 1121724229

New Writing Certificate Program Broadens Career Prospects

Aswani Volety - UNCW College of Arts and Sciences

Trending News

Off The Beaten Path, These Cafes Are Worth Special Trips

Jessica Maurer - Mar 14, 2018

Developer Again Seeks Military Cutoff Rezoning With 'less-intensive' Plan For The Avenue

Cece Nunn - Mar 16, 2018

Steak N' Shake Still Aiming To Establish Wilmington Presence

Jessica Maurer - Mar 14, 2018

Marina Grill Opens Today At Port City Marina

Jessica Maurer - Mar 14, 2018

Toys R Us Demise Could Put Valuable Wilmington Property On Market

Cece Nunn - Mar 15, 2018

In The Current Issue

MADE Winners - Functional Product Category

Flow Sciences LLC, Maverick American Spearfishing and Surgilum made the list of MADE Winners in the Functional Product Category....

MADE Winners - Arts Category

Intracoastal Iron & Metalwork LLC, Second Set Designs LLC/Tachits and TAY HAM are the winners in the MADE Arts Category....

Rouse On Remaking The Mall

Changes are on the way to Independence Mall, one of the most high-profile commercial properties in the Cape Fear region. On April 5, the Rou...

Book On Business

The 2018 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!



WilmingtonBiz Expo - Keynote Lunch with John Gizdic, CEO, New Hanover Regional Medical Center
Wilmington's Most Intriguing People of 2017
2017 Health Care Heroes