Meghan and I just returned from a Viking River Cruise. For those of you who have seen the ads for these cruises, it’s easy to see that the target audience is retired individuals. You never see young people standing on the bow of the ship, gazing longingly at the shore of Bordeaux…it’s always older individuals. After our cruise, we can attest to the fact that had it not been for the presence of a 22-year-old girl, we would have been the youngest people on the ship.
I’m going to be 52 this year and as I’ve gotten older (and more worn down by my 29 tax seasons), I think about what retirement means. What happens to my firm if I retire? Would I sell it or would I just walk away? As Meghan and I met people on the cruise over delicious dinners and more delicious wine, I asked a few of them if they were retired. The vast majority of them were, and one individual told me this:
“If I can offer you one piece of advice as you start to think about retirement, it’s this…retire as soon as you can. It’s the best move I ever made.” This individual had a rewarding career in financial services and was fortunate enough to retire earlier than most. It was also obvious by her expression as she told this story that she had been having the time of her life…she moved closer to her other family members, stayed involved in the lives of her grandchildren, and was able to travel both on her own and with her family. I know that many won’t have the opportunity to
retire earlier than 65-70, but it got me thinking…
"Am I doing everything I need to do right now to ensure I could retire when I want to?"
Here are three things that we, as business owners, should strongly consider if we are within 5-10 years of exiting our businesses:
Begin documenting your processes today – If you plan on selling your businessor leaving it in the hands of a capable key employee, please make sure your processes are documented. We, as business owners, are the kings and queens of keeping all this important info in our heads and not in a digital document or paper-filled binder. This isn’t an easy assignment…processes change along with the technology we use, so you have to stay on top of it. But it will pay off BIG when and if you decide to sell your business. Processes sell.
Revisit your retirement investing – If you’re one of those small businesses that is fortunate enough to have a retirement plan, make sure you’re taking full advantage of all the investing opportunities available to you. As you think of this, make sure to coordinate with your financial planner so that you are making decisions that positively impact your overall financial picture.
Monitor your progress – Setting goals is one thing; monitoring your forward progress will make them feel more attainable. So, for instance, if you want to sell your company to a key employee, plan out a schedule whereby you introduce that employee to the things that only you know. Do it slowly, and check off each milestone as you achieve it. If you are likely to sell your business to an outsider, start thinking about what that potential buyer would find important and begin to build a database of information. Spend one afternoon each week
putting information together; this may take months, but at least you’re moving forward.
There are other considerations as you consider retiring…we do a tremendous amount of tax planning for our small businesses when the owners consider selling, for example…but these are just three things you should consider. Please let me know if you have questions on any of these or if we can be of assistance as you consider your options.