Planning for Retirement: 5 Steps for Savvy Business Owners
After years of being a busy business owner, you may be thinking that it’s time to sell off your business and finally enjoy the retirement you’ve been dreaming of…but, not so fast! While you’ve likely accumulated valuable assets along the way and have big hopes for selling your business, there is careful, strategic planning that needs to take place first.
Here are 5 things to think about as you start planning your exit strategy so you can transition into a retirement that won’t leave you financially strapped or stranded:
1. Start preparing now Even if your retirement is 5 or 10 years down the road, you need to map out your business plan and your retirement goals today. Selling a business isn’t like selling a car or a home; there are specific industry processes, market trends, financing issues and more to consider. Succession planning is a slow process, and one that needs careful planning and regular management. 2. Take stock What shape are your finances in? Is all of your equipment in good condition? Do you own property, and if so, what’s its value? You’ll also need to take inventory of everything your business has accumulated, from cell phones to office equipment, vehicles and of course…your product inventory! The more prepared you are with up-to-date and organized records, the more impressive your business will look to potential buyers or investors. 3. Find out what your business is worth You may have paid a small fortune for equipment or software over the years, but in today’s market, some of your business assets may not have much resale value. Further, you may be banking on future cash flow potential that might not exist in years to come, depending on a variety of factors such as consumer demand, environmental issues, and the business model. Before you start repairing, replacing or updating your business assets, find out first if that’s a financially savvy move. A formal estimate can help you find out what you can expect to get if you sell your business, helping you better plan for your retirement. 4. Don’t put all your eggs in one basket Many business owners think that once they are ready to retire, they can simply put the company up for sale, and within a few months they will be able to walk away with their retirement nest-egg. Sadly, that’s not the case these days, and all business owners need a Plan B for their retirement. It’s not easy to sell a business; the timing and demand need to be perfect, and even then it can be a difficult pursuit. For this reason, it’s important to start saving for retirement BEFORE you retire, and to diversify your portfolio beyond your business assets. 5. Get professional advice You may know your business and industry inside and out, but it’s important to work closely with a financial expert who specializes in retirement planning for business owners. Make your transition into retirement a well-planned and well-executed process; it’s the best way to maximize your wealth potential. Darryl Smith of Synergy Life Financial will work closely with you to find solutions that work for you and your business, so you can bank on a financially secure retirement. Don’t leave your life’s work to chance; you deserve more than that. Be sure to connect with Darryl today by calling 705-434-0562 or emailing firstname.lastname@example.org to discuss your retirement plan and business succession options. You’ll be glad you did!