Selling your business? Remember to stage the business!
As independent business people and business owners, we all have to save for our retirement. Unless we previously worked for a large employer or the government, selling your business just might be the only pension plan we are likely to have.
The big question is, “How long do we have to run our businesses to get enough money to comfortably retire? “
Unfortunately, it’s impossible to give a one-size-fits-all answer to that question as it will depend on factors such as your health, the kind of lifestyle you want to have in retirement, the age at which you want to finish working, and how much you put aside each year. If you are selling your business for a good price, that will go a long way to funding a lifestyle that is equivalent to or even better than what you are living now.
One way to ensure that you will be selling your business for top dollar is to prepare it ahead of time and stage it as you would your house before it goes on the market. “Staging” your business to increase your profits and reduce the amount of time to sell it involves operating as if the business was going to be sold fairly soon. Dust off your business plan, update it and carry out the actions needed for the business to be attractive. Increase your client base, invest in technology, redeploy staff – whatever it takes for a buyer to see a profitable future for themselves as the new owner.
As for knowing how much you need in retirement, make a written retirement plan and project the income you’ll need to live your dream life. Will you spend six months at the cottage and six in a Caribbean Island? Would you rather keep your home so the kids and grandkids can come to visit? Once you have this plan, there are lots of on-line calculators that help you do the math. With what you’ve saved so far, what you can save going forward, plus your future CPP and OAS payments, you can estimate your income and your tax situation.
Maximizing your savings in registered accounts and getting the best possible return on your investments in line with your risk profile are two ways to get closer to figuring out the answer, for you. Through Assante, I can offer you a Financial Snapshot of your retirement years. And, if selling the house is part of your retirement plan, you just might want to stage it too!
Just good advice.
In “The Chicken or The Egg” I discuss whether to pay off your business loan/mortgage before you start investing.