Common Retirement Mistakes By Small Business Owners

Many small business owners view their company as their greatest asset. And while this may be true, your business shouldn’t be your only asset. While selling a successful business is a great way to gain a lump sum for retirement, owners could lose out on a reliable next egg if they don’t plan properly.

retiredHere are four mistakes small business owners make when it comes to planning for retirement:

  1. Many entrepreneurs only invest back into their companies. It is important to set aside liquid assets from the business and place them in retirement vehicles like an IRA or a 401(K).
  2. Before trying to sell your business, clean up shop. Begin your pre-sale planning two to three years in advance. Selling a business is a time-consuming process; make sure you allow yourself the time to do it properly.
  3. Don’t sell to the first interested buyer; better offers may come your way. One way to do this is by creating a private auction allowing multiple bidders to express their interest in the company.
  4. Don’t expect one large payout. Thirty percent of business sales involve a seller’s note, meaning the seller will receive payments over a set period of time that adds up to the business’s total worth.

 

Planning ahead and avoiding these four mistakes could put you in a great position for your retirement. Happy planning!

Note: “Fresh Ideas” are published each week by Countybank and its family of financial service companies. With financial centers in Greenville and Greenwood, Countybank has a team of highly engaged professionals ready to bring a full scope of financial solutions designed to help families and business owners reach their goals.