For people who are self-employed or who own their own businesses, there are some helpful tips that can help reward these hard-working individuals as they near retirement. Think about how you can benefit from the value of your business as you reach retirement age, and how to safeguard your financial assets and get the most out of what you have done over the course of your career.
Building Value and Planning
One important part of what you should do with a small business involves creating a structure where the business is easy to pass along, or versatile enough to change hands without too much trouble.
One way you do that is by adding organizational value -- creating a team set up where individuals can move in and out of the business to help sustain it, and setting up business processes that don't need to be micromanaged by the business owner. This can be harder than it sounds -- too many small-business owners are very hands-on, right up until the day they can't work anymore. Try to avoid this crisis by building organizational value into your business.
Prepare for a Sale
The sale of a business is not a simple thing. You can't just reach retirement and hand over the keys.
In fact, experts point out that up to 80% of small businesses that are put on the market don't actually sell. That means your business has to stand out in terms of the above-mentioned versatility and durability to make transitions work. You wouldn’t sell your house without some kind of staging, and your business sale should involve some work, too. Start by looking at the products and services that you sell, and dust off your old business plan to create a strategy for passing the business on.
When you avoid the huge mistake of trying to hang on to your business too long, you get top dollar for everything that you've built, and you get the ability to walk away from the business when you need to, rather than hanging on by the skin of your teeth. For more excellent advice on finance and business, keep an eye on PADGETT BUSINESS SERVICES® – we help our clients to practice good financial strategies to maximize their wealth in an uncertain world.
Do you have the support you need to manage your small business bookkeeping?
Schedule a 30-minute appointment to speak with a local small business adviser.