When you put the characteristics of an entrepreneur into google, one of the top results is self-motivation. But what happens when an entrepreneur loses their drive?
All across social media, every post saw people happy to see the back of 2020. For many business owners, the reviews of the year all showed common themes. Challenges, declining cash reserves, the uncertainty of what to forecast and a continually moving target.
The Government will need to pay for the support measures with many commentators pointing to potential tax rises, including Capital Gains Tax. You may not think that this is very interesting but if you own your own business and plan to sell this could mean up to a 35% increase in the tax you pay on your business’ sale.
I have had numerous conversations with exhausted business owners over the last six months who have genuinely lost their motivation, drive, and passion for their business. As discussed with The Times – entrepreneurs have simply “lost the energy to keep building their businesses. They are contemplating either simply shutting down or taking a reduced value to sell and get out.”
Those who no longer have the drive to continue it may be time to take stock and make a life-changing decision. Do you shut down the business now and protect the cash within and potentially pay a lower tax rate, or do you keep going and look to rebuild your energy and trade through?
It is clearly time to think about “balancing the risk of further losses against taking the money now”.
Now is the time to make that decision!
If you still have the self-motivation – keep going. If 2020 has extinguished that fire then think about taking the cash out in the most tax-efficient way before the changes are made.
On the flip side for those looking to acquire businesses, there may never be a better time than now to make that offer for the business you have had your eye on!