Cash Flow Dependence: The Hidden Trap That Keeps Business Owners Stuck
For many business owners, the business isn’t just a source of income — it is their entire financial life. Their mortgage, lifestyle, savings, and retirement expectations are all tied directly to the cash flow the business produces. On paper, they own a valuable asset. But in reality, they’ve built a financial structure that makes exiting feel terrifying rather than liberating. This is the cash flow dependence trap — and it’s one of the biggest reasons owners delay selling far longer than they should. When the Business Becomes the Retirement Plan Many owners fully intend to save and invest outside their business. But over time, reality gets in the way: The business needs reinvestment Personal expenses increase Taxes consume a large portion of earnings Market volatility makes investing feel risky So instead of building diversified wealth, the owner simply continues to rely on the business to provide income. Years turn into decades. And eventually, the business ...
