At a certain point, even superheroes have to hang up their capes and say “Mission accomplished” so why do many business owners have difficulty retiring? It’s a necessary part of being an entrepreneur, and there are many reasons why you should prepare for this step.
Thinking differently about retirement
When you say the word “retirement”, a lot of images probably come to mind. Just because you’re retired doesn’t mean you’ll be bored, lonely and stuck in a rocking chair. There’s nothing stopping you from starting other projects.
“Business owners are cut from a different cloth”, explains Richard Quinn, a business transfer manager with Desjardins. “They’re risk takers and they run on adrenalin. For someone who owns their own company, taking on new projects and focusing on something other than the business feels wrong-it’s a little bit like giving up.”
Protecting your company
But because everything does eventually come to an end, you’ll need to think about what’s going to happen down the road and protect your company. You haven’t worked hard all these years only for it to close just because it’s time for you to retire!
Angela Iermieri, a financial planner with Desjardins, puts it very plainly, “A business owner plays a key role. If something went wrong tomorrow morning, the company would still need to carry on like everything was okay.”
According to Richard Quinn, there’s no one way to keep a business alive, but there are some things all entrepreneurs should consider, “Business owners need to ask themselves if their company is ready to be left to someone else’s care. Is the team on solid ground? Is the company profitable? Do we know who our market is? Do we have a game plan? Who’ll take care of the business later on?”
Thinking about the future and gradually preparing for a transition is a little bit like drawing up a will and starting the mourning process. It’s hard but necessary to secure the future of your company.
After you retire, you may of course choose to help out in a mentoring role, but by planning for retirement now, you leave your loved ones time to decide if they want to take over the family business.
Doing the math
Many business owners see their company as their pension fund. “This is often a mistake”, says Angela Iermieri, “Entrepreneurs might misjudge the value of their company because they’re emotionally involved. What’s more, a company’s market value can change because of the economic environment, the market or even because of the owner’s personal situation.”
It’s important to ask yourself how much you’ll actually have once it’s all said and done. Will there be enough for a comfortable retirement? Will I have the money to start new projects and protect my loved ones’ financial security at the same time?
If you’re coming up with “No’s” to these questions, you’ll need to diversify your assets. And the earlier you start thinking about all this, the more time will play in your favour.
Make your dreams a reality
Once you’ve left your business, you’ll be starting a new chapter in your life: it’s the perfect time to move on to fulfill other dreams! Remember, you’ve got 168 hours to play with every week.
If you can’t think of how to fill your days, why not talk to other entrepreneurs? You might get some helpful information and become inspired.
As we all need to feel useful, why not share your expertise with young entrepreneurs or consider working in a new field?
Just think about it—when you plan your retirement, you’ll be protecting your life’s work, ensuring the future for you and your loved ones and making room for new challenges. Are you ready?