Running a business takes up a huge amount of time and energy, which in turn means that long-term jobs such as planning your pension or retirement can be pushed to one side and left to deal with at a later date, when it is often to late to make sensible and worthy decisions. But, there are some simple things to consider when you are planning on retiring from your own company which can save you and your business from a lot of stresses and headaches further down the line.
When you begin planning for retirement, then you need to start by deciding where you want to end up. Knowing the result that you want to achieve will allow you the ability to start planning, whether you want a modest life or want to travel the world, having goals in mind is key.
Financial goals, just like any goal, work best when they are time-sensitive and specific. Set yourself realistic and intentional financial and retirement goals so that you can work towards earning the retirement lifestyle you’ve always dreamt of. Whether you are choosing to sell your business, hand it over to another employee or family member or even close the business, then you must prepare for retirement.
Develop Your Succession Plan
When it comes to the corporate world, there is almost always another employee waiting in the shadows to take on the role of a co-worker who has retired. This is not usually the case for those who own their own business and plan on retiring, as they have a far more difficult time handing over the control to another person. Over 34% of small business owners don’t have a succession plan in place, but knowing just how you are going to leave your company and who will take over once you leave is part and parcel of planning for your future and your business’.
First, you must speak with a lawyer in order to figure out the legal requirements needed for creating your succession plan. Then, you must meet up with the employee or succeeding family member you have in mind to take your role and ensure that they are the best person for the job.
Create Your Support Team
Knowing all of the ins and outs of planning your retirement requires specialised knowledge, right from the best saving options to understand any tax implications that come from selling your business. Working with the right professionals can help you to plan effectively for each and every step along the way.
Be sure to surround yourself with a trusted team of professionals, particularly when it comes to your finances. This is one of the best habits to form and one which is used successfully when done properly. In an ideal world, all of the professionals should work together to ensure that everything is being done in alignment with your goals for the business and personally. Let them do the job which you hired them to do so that you can then focus your energy on being happy in your time left at the company. You don’t want to look back and be reminded of a leaving period filled with stress and unease.
Plan How You Will Step Away
If your goal is to fund your retirement solely from the sale of your business, then you must plan this early to make sure that it is ready and appealing to potential buyers. Far too often, business owners start making plans when they are desperate to sell. Often, they haven’t begun preparations because they don’t know how, or they thought someone else would take over and this can have negative effects on their sale. If the business is undergoing a mezzanine funding process, investments or business negotiations, then these must be declared during the process.
In order to avoid this, you must begin approaching any potential successors in advance, even several years before you plan on retiring. This is to make sure that employees or family members are interested in taking over your business. If they aren’t, then you must get a valuation of your business and begin planning a sale around 3 years before you plan on retiring.