Your Business Is Not Your Retirement Plan
If you are a business owner, here are a few considerations you need to be aware of.
Your Business Is Only As Valuable As Someone Is Willing To Pay
If you’re planning on selling your business to fund your retirement, you need to remember that any asset is only as valuable as someone is willing to pay for it. Your business may be going well now and it may even see it’s value increasing over time, however, it doesn’t take much for an industry to be disrupted and for business values to plummet.
Think about taxis. A few years ago, a taxi licence in Queensland could be sold for $530,000. Then along came Uber. Now, they are valued less than $150,000.
Imagine if this happened to your industry.
As much as we want everything to pan out exactly to plan, life simply does not work like that. Everyone experiences their own fair share of ups and downs and you just don’t know what is around the corner. If something happens to you which prevents you from working in the business, you could be forced to sell prematurely. This may not happen at an opportune time, meaning that you walk away with a lot less money than you planned.
Business Owners Need A Retirement Plan
You wouldn’t run your business without a business plan, so it doesn’t make much sense to not have a retirement plan. Your retirement plan will include how much income you want in retirement as well as the amount of assets you’ll need to generate that income.
A well thought out retirement plan will lay out the steps you need to take to reach your retirement goals as well as put in place a number of contingencies, just in case it doesn’t all go to plan.
When it comes to creating a retirement plan, you need to recruit a professional financial planner. Puddle 2 Pond Financial are specialists at creating retirement for small business owners since we are a small business ourselves. We know the challenges that you face as a small business owner and we can help you navigate your journey towards retirement.