What the clients were excited to tell us was good – very good. The husband-and-wife team had just closed the books on a particularly successful year in the business they built from scratch over years of struggle and frugality.
A profitable year calls for prudent advice.
Naturally, they were elated finally to be able to make a $5 million cash distribution from the business to themselves. Yet while listening, we heard a new anxiety had crept into the clients’ voices – how to invest those hard-earned dollars wisely? They were understandably nervous about having the rewards of their blood, sweat and tears lost to volatile markets and uncertain risks. To their great relief, we showed them that investing their money was really the easy part. Analyzing their overall situation led to designing an investment portfolio for the clients that matched their careful approach to finances, supported their long-term goals, and helped them enjoy the fruits of their labors.
How we amped up their peace-of-mind.
What we uncovered during the planning process was even more important to the couple’s being able to sleep better at night. One problem was their company had an expensive, poorly managed 401(k) retirement plan creating disgruntled employees and unnecessary staff turnover. Switching plan managers easily solved the 401(k) problem. A deeper issue emerged as the couple felt trusting enough to share with us their real concern. They wished to sell the company in five years. Hearing this previously unspoken desire, we turned our attention to the prospect of selling the business – weighing (a) whether their children might choose someday to enter the business, (b) the possibility of selling to key employees, and (c) whether to hire an investment banker to sell to a strategic partner. In the end, C was the chosen route. An added bonus: during the sale Abacus uncovered two major tax oversights by the couple’s CPA that resulted in income tax savings of $45,000 over two years.