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5 Retirement Strategies for Small Business Owners

March 29, 2024

          As a business owner you wear many different hats. From the head of marketing, sales, service, and all the way to the chief financial officer. Trust me, I know. The buck stops with you! Too many times, small business owners spend all of their time running their business and don't think about their own personal retirement planning goals. Well, here are 5 strategies a small business owner can implement right now to get pointed in the right direction. 

  1. THE RETIREMENT ROADMAP

          Retirement, yeah that's funny. I'm never going to retire, right? Well, if that's your plan ok, but it you would like to set yourself up to successfully step away from your business one day, you'll need to do some soul searching and set a date that you would like to achieve the goal. Just like a personal financial plan, you'll need to determine what that retirement lifestyle looks like, and will you have the resources available to achieve it?  

       2. THE EXIT

          That day has finally arrived. You made it! RETIREMENT. But have you put some time into the exit strategy? Do you plan to sell the business, pass it along to the next generation, or simply close up shop and sell off all the assets and liquidate everything at a fraction of what it could be worth? Having a clear exit strategy may help you get top dollar when it's time to sell or help preserve the legacy you've worked so hard to build. 

       3. BUSINESS REINVESTMENT AND RETIREMENT SAVINGS

          Profits, buy inventory, profits, add services, profits, more inventory and so on until one day all your eggs are in your proverbial "one basket", your business. We all know diversification is critical to a well thought out retirement plan, but so many business owners sink all of their assets into the business. Setting up retirement plans can help achieve more diversification and there are great tax savings along the way as well. 

       4. PROTECT WHAT YOU GOT

          Many times, business owners have extra liabilities. If you have taken out loans to support your business by using personal assets as collateral and you pass away, your family member may be on the hook for debt. Or what if you're in a partnership and your partner dies or becomes disabled?  Do you have a formal operating agreement and buy/sell dictating what happens to the business interest, or is their spouse your new business partner? Do you have enough life insurance or disability insurance for your family to buy out the other partner, so the business can continue, uninterrupted? 

       5. YOU'RE NOT ALONE

          You are focused on running and growing your business. You can't possibly be an expert in every aspect of the business. That's where relying on a team of professionals can keep you on track. Considering a tax accountant to keep your tax records and payroll compliant. Consider a financial professional to make sure your insurance is adequate and your savings and investments are diversified. And consider a business attorney to make sure you stay out of trouble. Once you have chosen a team, connect them together to work cohesively on your behalf. 

           Business owners have many unique challenges when it comes to their finances. But with a well thought out plan and the right professionals to work with, it can be a lot more comforting knowing you're moving in the right direction.