Succession & retirement planning: a double challenge for business owners
Posted By Michelle Di Gangi In Your Business | No Comments
As every entrepreneur or small business owner knows, planning for retirement is much more complicated than just putting money into a retirement account.
When you own a small business – and particularly when that company has been your dream and that you’ve sacrificed to help grow – the mere idea of relinquishing control can be difficult. However, for many, it’s inevitable. It’s not just age: The company is often the primary asset, so tapping into its value is essential to finance retirement.
The data is clear: Small business owners are wary of succession planning. A 2014 poll by the Financial Planning Association in conjunction with CNBC found that only 30% had any investments outside their own business [1] and delay drawing up any formal succession plan. But it’s a task that must be confronted to look after both your retirement and the future of the company.
Of course, each owner needs to find his or her own solution and be creative in exiting the leadership role. Even the timing of your plan can be critical, as REDCO Inc.’s Keith Hawkyard shared with me [2] in our interview about his business succession planning.
Here are several other key elements worth considering as part of your plan:
The biggest factor in your favor? Being a small business owner means that you’ve had a lifetime of successfully tackling complex problems. You’re just adding one more to the list.
For more information that may help your business succession planning, read our “Smooth Transitions” report [4].
Article printed from Bank of the West: https://changematters.bankofthewest.com
URL to article: https://changematters.bankofthewest.com/2018/05/14/succession-retirement-planning-double-challenge-business-owners/
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[1] only 30% had any investments outside their own business: https://www.cnbc.com/2014/08/19/cnbcfinancial-planning-association-survey-finds-small-business-owners-are-too-focused-on-their-business-to-plan-for-their-own-financial-futures.html
[2] REDCO Inc.’s Keith Hawkyard shared with me: http://blog.bankofthewest.com/2016/02/23/customer-wise-making-a-path-for-family-succession/
[3] Employee Stock Ownership Plan, or ESOP: http://blog.bankofthewest.com/2017/12/19/business-succession-planning-options-esops/
[4] “Smooth Transitions” report: http://blog.bankofthewest.com/wp-content/uploads/2016/01/Succession-Planning-Whitepaper_final.compressed.pdf
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