As a small business owner, retirement planning is all on you. There’s no boss to skim off money and set it aside for you.
For many business owners, early retirement seems like a pipe dream.
In fact, research by the Guardian Life Small Business Research Institute showed that a third of business owners don’t plan to retire until they are seventy or older.
However, early retirement can be a very real possibility for you as a small business owner. It’s all a matter of planning.
So just what can you do to grow your business now and set yourself up for early retirement?
Maximize Your Profits Now
It sounds simple, but if you want to retire early, you need to maximize the amount of money you bring into your business. Growing your business now will make you financially stronger in the future.
There are many aspects to this, but the core of it is to know what is working in your business and what isn’t, and do more of what works. In addition, be open to new opportunities and look for profitable ways to expand your business.
Growing your business now means having a balanced approach to spending and investing.
You don’t want to lose money ahead of your retirement by making decisions that don’t work out as you hoped, but being stingy won’t help you to grow.
Aim for the middle road by planning business decisions carefully and making sure you have all the facts to hand.
Know What You’ll Need and Plan for it
As the article “How Much Do I Need to Retire Early” points out, early retirement means different things to different people.
What you’ll need if you plan to retire to a cozy cottage and enjoy the countryside will be different to if you want a fancy apartment and a full social life.
The amount of money you’ll need will vary depending on the lifestyle you want to enjoy, the amount of savings you already have available, and any other assets you have at your disposal.
Once you have a clear idea of what you’ll need, formulate a realistic plan to help you attain your goal.
It’s a good idea to get some expert financial advice at this stage, to help you understand the pros and cons of different investments and retirement plans.
Once your plan is in place, stick to it like glue! Don’t dip into your retirement money or skimp on payments. Stay focused on your future.
Have an Exit Strategy
Chances are, you’re planning to run your business successfully for years yet. But what will you do when you’re ready to leave your business behind?
Your business will need to be sold, so preparing in advance to make the best sale possible is smart. Of course, growing your business and making it profitable is a vital first step, but there are some other things you’ll need to take care of, too.
If you know you’ll want to sell your business sell it as-is you’ll need to make sure it can run without you, whether by building up a competent team, or simply by having the best business processes in place.
Think about the kind of people you might sell to.
Last but not least, build in enough flexibility that when retirement time comes, you can keep your business going until the optimum time to sell.
Running a small business and retiring early are not mutually exclusive.
By planning carefully for the future and doing all you can to grow your business now, you can set yourself up for a retirement spent exactly as you would like to spend it.
About the Author: Tristan Anwyn writes on a wide variety of topics, including branding, social media and how to plan for retirement.