How to prepare to retire from your small business

It is inevitable that at some point in the future it will be time to step away from your business. Only you will really know when the time is right, based upon your financial and physical health, as well as the health of the business.

Similar to most people who work in corporate America, the typical entrepreneur doesn’t spend a lot of time thinking about the financial aspect of retirement. If you are like many small businesses, you attempt to keep growing your business by reinvesting profits into items that will continue to drive sales. Savings is something that most do not do. According to a survey by Manta, one-third of business owners don’t have any retirement plan, and 75% of respondents to a BMO Wealth survey said they had “$100,000 or less” saved for retirement.

The mindset of many is that they will grow their businesses until the time is right, and then exit by selling the company. Usually during this growth little is taken out as salary for the owners. In a sense, this strategy is really putting all your eggs in one basket. Just because the time becomes right when you want to sell, doesn’t mean the stars will align for you. That’s a risky strategy that doesn’t account for economic recessions, emergencies, and unexpected downturns that can significantly impact your selling price and thus your retirement package. Let’s take a look at couple steps you can take now to help you retire when the time is right.

•  Put Yourself 1st:  I know that as a business owner it is very easy for us to put everything and everyone before ourselves. Therefore, determine that you are going to set aside something in an IRA, Roth, 401k, Simple IRA, etc. to diversify your retirement strategy.?
• ?Professional Financial Advice: The vast majority of you will not be working in the financial sector and thus not have expertise in retirement planning. Look to hire a certified financial planner CFP®. The right CFP® can help you plan for your future in a way that also works for you now.