Recently, SCORE, the premier organization of volunteer business mentors, published an infographic outlining the results of a retirement survey among small business owners. Unfortunately, it reveals an alarming lack of readiness. The smaller the business, the more exit planning is lacking.
Download the infographic here:
Small Business Owner Retirement Readiness Infographic from SCORE
A lot of retirements are involuntary and sudden. For this reason, it is essential to get this started early so there is a plan for the survival not only of the business, but more importantly for your family and anyone else who depend on your ability to run it.
The research reveals that four out of ten are not sure that they will be able to retire by age 65. Three of them do not have retirement savings outside the business at all. Two of them expect the sale of the business to provide the funds for their retirement. That is seriously disturbing because other research shows that not only do they not have an accurate picture of the value, their expectations are usually grossly exaggerated. The one valuation factor they overlook most often is the fact that they are the business. It cannot run without them and therefore has no value beyond its equipment and inventory.
Of course, you are not one of those people because you have watched the video on this page and read the books I have recommended, right? Business owners are different than other people. They take more risks. They are willing to take a step not knowing exactly where it leads. I get that, but retirement is inevitable. You just don't know when. The good news is that it is one of those things you do have a great deal of control over as long as you get started early.
When Is The Right Time To Sell My Business?: The Expert Answer from Richard Mowrey
Timing is definitely a factor when it comes to selling your business and hopefully reap the rewards of your hard work, but this book goes into a lot more detail than just timing.
You will learn how to value your business so you will know precisely how much is available for your retirement. If there is a gap, it also provides a number of things you can do to close it before it is too late.