3 Things Entrepreneurs Must Do When Planning for Retirement

While there are many things an entrepreneur needs to keep in mind while starting and maintaining a business – payroll, inventory, and cashflows – planning for retirement is something that can often be tossed to the wayside. So, it’s crucial that independent business owners also plan for retirement while also planning the next fiscal year’s budget.

At Forbes, business owner and career coach Kim Neeson offers entrepreneurs three tips for planning their retirement.

“You created a business,” writes Neeson. “You can create an exit strategy.”

Plan Ahead

For small-business owners, it’s essential to make plans as early as possible. Entrepreneurs need to know well before they retire what happens with their business when it’s time to step away from the business they built.

“The time to think about your next stage isn’t when it’s thrust upon you; it’s when you have the luxury of time and the ability to put whatever plans you develop in motion,” Neeson writes. “At the end of it all, are you in a big job that will just end one day, or are you creating a business that can carry on through a buy-out, continuing with key employees doing most of the heavy lifting, or handing the reins over to family?”

Choose Your Plan

What happens to your business once you retire? Are you going to sell your business or close shop? Pass the torch to your employees or hand it off to your family? Whatever your decision, it’s important to figure out which path to take and the steps required to get there.

For example, there are many questions that come with selling the business, such as: whom would the potential buyers be? What would you need to do to make the business less about you and more about your products or services? And what infrastructure needs to be put in place or improved? These are just a few questions that you need to ask yourself before considering this option.

Likewise, with working your business until retirement. Are you okay shuttering the business you spent years building? Have you prepared severance packages for your employees? What will you do about any office space you’ve leased or inventory you’ve accumulated?

“To come up with possible plans, it’s important to have clarity, vision, and goals,” writes Neeson. “What do you want? Why do you want it? When do you want it by? How will you get it? Is there more than one option? If so, what is the preferred option (Plan A), the secondary option (Plan B), etc.? These are big questions that require deep thought, dissection, and a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).”

Lay Out Your Roadmap

Entrepreneurs must always think about where they’re going and how they’re going to get there. According to Neeson, it’s helpful to think about the path ahead like looking at a roadmap. As is the case with any journey, “there will be detours, delays, and misadventures along the way, but still, you know where you’re going.”

Entrepreneurs should take advantage of available resources like their business lawyer, accountant, banker, and coach to ensure you navigate all options for your ultimate destination. “Without a map, you’re just driving around with a lot of unnecessary detours and stops,” Neeson writes.

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For more news, information, and strategy, visit the Retirement Income Channel.