Business owners: Tips for transitioning to retirement

March 1, 2011 - PRLog -- You have spent years working hard to build your small business into the empire it has become today. But now you are contemplating beginning a new stage in life. Perhaps your's is one with a cold drink in your hand and the warm sun on your back, or maybe even trekking out to the scenic mountains for days on end. Whatever it is you would like to pursue in this next life of yours, here are a few tips to get you from business owner to retiree status.

•         Give yourself (and your employees if you have them) time for your transition to retirement

Most business owners need about 10 to 15 years (if not from day one of their business grand opening) from the planning stages of retirement to actual retirement. Will you be acquired by another company? Will you merge? Will you try to sell outright (to family members, employees or a third party)?

“Whatever your plans, develop an exit strategy that ties into the business achievability and your personal goals,” said David Richmond, Chairman & Chief Investment Officer. “Also, make sure you give yourself time to hire and train key people to help you make your exit.”

In addition, make sure to remain flexible. As you already know, business changes over time and so may your goals and opportunities.

•         Have sources of retirement income beyond the sale of your business

“We’ve come across many business owners who rely solely on funds from selling their business for their retirement nest egg. The problem is many of these businesses do not have someone willing to pay cash and buy them outright,” said Matt Curfman, Senior Vice President of Investment Services. “It’s difficult telling someone that all of their hard work and dedication to their business won’t truly ‘pay off.’”

There are multiple reasons that businesses may not get offers for purchase, but it even happens to those whose businesses are quite profitable. So, diversify your assets in order to help reduce risk by having more opportunities than just your business as part of your retirement plan.

•         Consult with a business advisor, lawyer and/or accountant about retirement plans

Not sure how to diversify your assets or make realistic projections of your retirement needs? Or perhaps you just don’t have the time to do it all on your own (you do have a business to run, right?). This is a time to call in the experts: a business advisor and a lawyer and/or accountant are some of the best team members you can have in your situation.

Your team will begin to look at the cash flow and profitability of your business to help guide you to make the most of your retirement planning. In addition, they can help you avoid taking on too much debt. “As Ed Slott Master Elite Advisors, Matt Curfman and I are constantly looking for ways our business owner clients can reduce the amount of taxes they must pay and reduce their debt accumulation,” Richmond said.

You’ve never retired before and you only get one chance, so make sure you have the professional backing to help avoid mistakes.

•         Prepare yourself emotionally for a new stage in life

Many business owners do not know how to step away from their work. They’ve been going non-stop for years and years. The best start is to detail exactly how you will spend your time after selling your business. Will you pursue a hobby? Will you spend your time with family and friends? Will you stay on an advisory board to keep some involvement with the company? Whatever it is you decide, you will need to have a plan in place. Perhaps a slow transition of your time away from the business (i.e. start working only half days) will help you emotionally prepare yourself. And if you can’t seem to detail what you will be doing after your business, chances are you are not ready to retire quite yet.

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About Richmond Brothers Financial Management Specialists, Inc.
RBFMS was founded by brothers Dave and John Richmond in 1994. Over its seventeen years in business, the company has evolved into a proactive wealth management firm focusing on retirement distribution planning. A $500M, privately-owned operation, RBFMS has helped hundreds of clients realize their retirement goals. The company is located in Jackson, Michigan and is currently able to service clients in the states of Arizona, California, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Colorado, Michigan, Minnesota, North Carolina, New York, Ohio and Texas. Securities are offered through Sammons Securities Company, LLC Member FINRA/SIPC. Fee based investment advisory services are offered through Sigma Planning Corporation, a registered investment advisor.