A working budget for the period between trading and leaving
- Topic
- Retirement decisions
- Reading time
- 2 minutes
- Last reviewed
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A retirement decision has a period between normal trading and the owner's final exit. The length and shape of that period can differ greatly between options. Build a working budget for that interval before choosing the option simply because its headline looks attractive.
This is a comparison of retirement choices. The fuller closure liabilities budget belongs to the eventual business plan, while personal retirement needs require their own professional advice.
Put the options on the same basis
Describe the start and finish assumed for each option. One might involve a defined handover to a successor; another might involve finishing existing work and closing. A third could retain a smaller operation.
For each, list the premises period, owner attendance and support required. Add costs that arise because of the option, including professional work that still needs a quotation. Mark costs already committed so they are not mistakenly treated as avoidable.
Do not count your own time as free simply because you may not receive a separate invoice for it. You can record hours as a separate practical constraint without inventing a financial rate.
Use ranges honestly
Some figures will remain uncertain early on. Show a reasonable planning range only where there is a basis for it, and state what information would narrow the range. Otherwise record "quotation needed" or "adviser question".
A fictional owner compares an immediate wind-down with keeping the workshop open for a succession discussion. The extra period may require premises costs and owner attendance. It may also preserve an option the owner values. The budget makes the trade-off visible; it does not make the decision automatically.
Continuing while looking for a successor explains how to give that additional period a purpose and review date.
Keep receipts separate until their basis is clear
Record possible equipment receipts with their source, date and assumptions. Do not use an optimistic estimate to make every option appear affordable. Ask the appropriate advisers which proceeds and costs belong to the business and how the wider obligations affect the comparison.
Timing matters too. The same eventual total can create a different practical problem if bills fall due before receipts. That question belongs in the closure cash timing map.
Review the working budget when an assumption changes. A longer handover or a retained workshop can alter the decision even if equipment values stay the same.
Discuss the asset-sale assumptions with UK Auction Group, then take the information back to the advisers reviewing the overall exit. Keep estimates and confirmed commitments labelled throughout the discussion.
Explore retirement decisions.
Sources
This guide is general information and education only. Legal, tax, employment and safety decisions may need a qualified adviser who knows your situation. Read the disclaimer.