Owning a small business is incredibly fulfilling, but it can also put you in situations that are unique. While preparing for retirement as an employee at a large company comes with plenty of guidance, taking time to prepare for retirement as a small business owner is completely different. How can you start preparing so that you’re ready to retire?
Prepare for the Unexpected
It’s hard to prepare for the unexpected, but that is a key part of retirement for any employee, especially small business owners. As you look to the future, think about how your business will continue without you, or if you want it to. Are you interested in relocating if the rent for your building goes up or it is sold? Thinking over questions like these now will help guide you as you prepare for retirement.
What Assets Could Fund Your Retirement?
If you own the building that you operate your business out of or another property, you could sell it when you retire to fund your retirement. As you prepare for retirement, think about what high-value assets you own that you might be willing to sell before sailing off into the sunset. Things like buildings and real estate properties are incredibly valuable if you are looking to close your business alongside your own retirement.
Passing on the Business
Other small business owners may have a child, longtime employee, or other person in mind to pass the business to. As you prepare for retirement, it’s a good idea to start having serious conversations with these people to determine if they are interested and how the business transfer will work. To help them succeed, starting this process as early as possible is a good idea. There is a big difference between working at a business and owning it.
Consider Private Equity
If you have a business that has attracted interest from private equity investors, it’s worth exploring the offers as you prepare for retirement. Many private equity investors are interested in fields like veterinary medicine, dentistry, healthcare, and even investment advising. A private equity offer is also a great way to transition yourself out of your business if you’d like to sell but don’t want to stop working right away.
Plan for Retirement and the Future with Help from MKS&H
MKS&H provides tax and accounting services to businesses of every size and in every industry. We can work with you to make taxes easily and avoid the most common mistakes. Contact us today for a consultation.
About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.