By Glenn Harper, Julie Smith, and Kristin Taylor
That often imagined state of bliss where work is a thing of the past and days are filled with hobbies, projects, vacations, and so much more.
Entrepreneurs have a unique set of needs when it comes to retirement planning. Recently, the three of us had a chance to sit down and discuss 3 things entrepreneurs need to do to make retirement planning possible.
The biggest issue facing many small business owners is their J-O-B. Many entrepreneurs go into business and end up creating a job for themselves. This comes complete with daily tasks, projects, and a hamster wheel they can’t seem to stop. They roll up their sleeves and get sucked into the daily work of ‘doing business.’ Pretty soon they are so busy, they forget what it is they’re trying to accomplish.
Clarify your goals
Being an entrepreneur is about more than the products and/or services you provide your clients. It’s extremely important to be able to stand back and look at your business from the outside. This is an intentional mindset shift to go from doing business to building your business.
What are your goals? Do you want to grow your business and sell it? Add locations? Acquire others? Add partners? By clarifying your goals and engaging trusted advisors who seek to understand your goals, hold you accountable, and help you understand your financial key performance indicators, you can plan for a successful exit from your business and into retirement.
Document your goals
To understand where you are and where you are going, every business owner should have a manifesto: a written document that clarifies what you are trying to accomplish with your business. This plan acts as a road map for future decisions. Adding retirement plans into the conversation now can help you plan for that end result.
100% of businesses will exit. It is a sad fact that most businesses won’t make it. Obstacles will come up. Setbacks will happen. But a written manifesto is the starting point for building a proactive plan that accounts for contingencies and sets you up for success. The bigger question is, “how do you create this proactive plan and know that it’s right?”
Get out of your own way
Shifting from doing business to building your business means refocusing your efforts. Most entrepreneurs don’t know how to run a business. This is where you get out of your own way.
Just like you are the expert in your discipline, CPA business advisors are experts in running businesses. For example, what does it mean to run a business? What can I deduct? What entity structure should I be? What should my labor as a percentage of revenue be? When should I hire someone? Can I write off my vehicle? What is my margin? Should I set up a 401K? Or, hire a few salespeople?
When you partner with a trusted advisor, they educate you on the answers to all of your questions. As you grow, they help you determine things like how to manage through unexpected losses or whether it makes more sense to put extra cash into a retirement plan or use that as operating capital to drive an even bigger return in your business.
Don’t let your business run you. Stop ‘doing’ business, and start building your business. You can exit successfully with a proactive approach, a clear plan, and a trusted advisor who can help accomplish your goals both now and in the future.