If you’re of the age at which retirement is starting to enter your thinking, you might want to consider what this might mean for your business. Retiring as an employee and retiring as a business owner are two very different things and there are some decisions that will need to be made and things to consider before you can push ahead with your retirement plans. Find out more about all this below.
Appraise the Current Situation and Value of the Business
First of all, you should think about the value of the business and how you might begin to appraise its current situation. If you eventually decide to sell up, it’s good to have these things understood. Get the accounts in order and be clear on all the things a potential buyer might want to know about in the future. An independent valuation is the best route to take.
Create a Detailed Succession Plan
A good thing to do is start the process of succession planning if you think you’re not likely to sell up. This is what you’ll want to do if the business is being passed down to the next generation. A succession plan will ensure that transition happens in a smooth and coordinated manner. That’s what you and everyone else connected to the business should be aiming for.
Plan Out How You’ll Enter Retirement
How you go about entering retirement and what your role in the transition period will be is another thing you should think about. Do you need to offer training to people taking over or are you already confident that the business is in good hands and that the people taking over know what they’re doing? Those are important questions to answer. And it’ll dictate how the early days of retirement go for you. Accordingly, you can plan about the investment options like self-directed IRA, Individual 401(K), Health Savings Account, and more.
Phase Out Ownership
Phasing out ownership of the business is usually a good idea. It means that you can still be available when you need to be and there’s less uncertainty about the process of transition that the business goes through. You don’t want the change to be abrupt because this can cause problems and difficulties for all parties involved.
Consider the Pros and Cons of Selling Up
If you’re not sure that succession planning and passing the business on to the next generation is going to be possible, you might want to consider the option of selling up the business. This means you’ll have a clean break and the business won’t be any of your concern as you enter retirement. It will also help your family’s financial situation going into your retirement years.
It’s a good idea to have decisions made regarding all of the things discussed above sooner rather than later. It’s only going to be a matter of time before you’re going to want to retire. Doing so will be much easier for you and a lot easier for your business and those around you if you have a solid plan in place.
