Diversify to Ensure Future Security
Do you have a plan to retire from your small business?
At Numbers House, we work with many small business owners, hardworking entrepreneurs like you. They’re often so busy with the daily running of their businesses that they haven’t thought about the day they’ll retire. Maybe they’re high achievers who think they’ll never retire. Or maybe they say something like, “When the time comes, I’ll just sell the business and retire on the proceeds.”
But it’s not that simple. It seems counterintuitive, but your exit strategy is one of the first things you should plan when setting up your small business. Here are some factors to consider when planning your exit.
The Future is Uncertain
The business world is full of risk. Market conditions, changing trends, even unforeseeable issues like employee or owner health problems all conspire to make or break a business. If you become disabled before your planned retirement date and have to sell quickly, your business probably won’t sell for what you’d hoped, or you might not find a buyer at all. So, don’t make selling your business your only path to a comfortable retirement. Diversify by partnering with a financial advisor and contributing to retirement plan like a Roth IRA.
Start with the Right Structure
Set your small business up for success from the start with the right business structure that will maximize your profit and minimize your taxes, making it more attractive to buyers. But be sure to plan for eventualities. For example, if your go with a partnership structure, what happens if your partner passes away? Do his heirs get part of your company? Protect yourself and your retirement plans by hammering out these details ahead of time with the help of a qualified professional.
Set a Date
Set a realistic timeframe for retirement and realistic retirement goals. Even if you get there and decide you’re not ready to leave yet, you’ll still have the peace of mind that you can if need arises. You’ll also avoid the appearance of a distress sale by taking it slow and planning ahead. Distress sales scare off some buyers or at the very least drive prices down.
If you’re setting up your small business, or if you’re a business owner looking to craft an exit strategy, it’s important to find professionals who can help you make informed decisions. The professionals at Numbers House can advise you in the best tactics and help you get it right from Day One. To learn more, call us at (865) 294-7300 or email firstname.lastname@example.org.