Being a successful business owner may seem like you have your finances in order, but many end up accidentally mistaking their business’s success for their own. Until you start to pick away your own financial health from your business’s, you won’t be able to adequately start saving or planning for your retirement.
It’s for this reason that so many small or medium-sized business owners find it hard to step back and actually retire, even if they find someone to carry on their business instead of selling it.
The good news is that it is absolutely possible to save up and plan through your retirement so you never actually have to go back to work (unless you want to, that is).
All you need to get started is to follow this guide:
Start with a Wealth Management Advisor
First things first, you need expert specialists who can advise you on your specific situation. No matter how many words you’ve read online; the fact is the only time you can get bespoke advice is when an expert is sitting there, physically looking at your assets.
Wealth management companies can help build you a custom financial planning strategy that includes how to grow your wealth with investments, how to plan your estate, manage your taxes and, yes, plan out your retirement.
Improve Business Operations
The next step is going to be to improve your business operations. This can be done with an in-depth audit that’s designed to help pinpoint inefficiencies and fix them directly. The goal here is to improve the profitability of your business.
Once you’ve done that, you will have prepped your business for one of two things:
- Making more money so you can take out consistent dividends without stress
- Make your business more valuable so that you can sell it for a higher price point.
Create an Exit Strategy
You will need to plan your exit as a successful business owner. What this means will depend on your plan. If you want to continue to own the business, for example, you can either start looking for a new business partner, or you can start investing in what’s known as succession planning.
For many small business owners, succession planning starts early, as they raise one of their children to take over to keep the business in the family. If your family isn’t interested (or you don’t trust them to manage your business), then it’s wise to start with your most loyal employees, and if you don’t find a suitable successor, then start looking elsewhere.
Start or Maximize Your Savings
In an ideal world, you will continue to earn a healthy income through dividends and that would be the end of it. Of course, that’s assuming your investments and business will continue to do well.
If something goes wrong, you want a backup. That’s why you’ll want to start maximizing your IRA or Solo 401(k) account now. Having even just a small backup plan can help you weather any storm, and give you more financial options throughout your retirement.
