I have been self employed for 6 years. The business has been our sole source of income for the last few years. The first few years it was just me as a solo practitioner working part time and then my husband joined and it has grown steadily from there. We moved to an office location 2.5 years ago and now have 8 full-time employees. Our income is around 160K after taxes.
Our commercial lease ends in 2 years and I am seriously considering exiting the business by then. I enjoy the money, but it is still a full-time job and after having worked part-time for so many years, I feel imprisoned by it. Even when I am on vacation or working from home, I still can't relax as long as the office is open. I find it highly stressful managing employees. As we grow all of this just becomes more complicated and I just feel in over my head. I really miss being a solo practitioner and having my part-time schedule and only having to worry about me and my own clients.
I struggle with this because we are not yet FI. My husband (who has very little involvement in the business anymore) thinks instead of selling it, I should transition out as much as possible after the 2 years and try to make it a passive income stream for as long as possible. I like this idea, but don't believe it will ever be the type of business that can be passive. Our industry is in the medical service field (kind of like me being a dentist and having my own dental practice) and it requires having licensed professionals "aka dentists" practicing. Whenever we lose a "dentist" I would have to be pulled back in to cover for them and can be thrown into full-time work at anytime while I have to search for months for a replacement. In other words, I would still always be the mercy of the business and our employees because it is all still my responsibility. And I would always be concerned about how the business is functioning and the quality of care. My employees may become resentful of me and there is always the concern that they could just open their own practices and take all of my clients, which they are allowed to do in medical care industries. I would still be fully liable for everything that takes place under the business. But I would always have the business to fall back on for as long as it's open.. and I have spent a lot of time and energy building this business. I could hire a team of admin people to delegate my work to and I could work very part-time. I could grow the business and potentially sell it for a lot of money. All of my staff are graduate students pursuing their license and that means in a few years I could potentially have a pool of more independent and profitable employees than I do now (although a very green one).
My other option would be to sell the business to a key employee. This employee has been with us since we opened our office and has been trained by me and received her license a few months ago. She has an interest in starting her own practice one day. While most medical practices are hard to sell because they are usually built on the clientele of the practitioner who opened it, she is the most likely to take over because our clients know her and trust her. We would not be able to sell for much (maybe $100k) because she doesn't have much capital--but she is likely the only person who would be able to take over the business without any major disruption. I would also offer to work part-time for the business for 1-2 years after the buy-out which would give us both more security as I have a decade more experience over her. If she were to leave the business before we sell, I believe we will miss the boat and may not be able to find someone as qualified willing to buy it at least not at its current size.
This is the big decision I am currently struggling with. I know that if I were to sell the business in 2 years, I would still need to work..but I don't believe I will have difficulty finding work and I can always work myself as a solo practitioner again. What would you do? I love being self employed--but I don't love running a business. Knowing this should I take advantage of this situation and allow this employee who has been with us since the beginning to take over the business? Or should I be more concerned about reaching FI first and unload the business at a time where I don't have to be as concerned about our livelihood?