Yes! This is Why Planning Matters in Business! 

Yes, you get to retire!  

You also get to choose what that retirement looks like.  

Forecasting and planning isn’t just for running your business. It’s also for after you finish running your business!  

Making sales, managing cash flow and keeping customers delighted with you and your team is critical in the immediate future, but what happens when you’re ready to retire? What if you want to go part time for a while, or even prepare to sell before retirement?  

Being proactive is essential to get your business ready for whatever you decide to do. Scaling your business, emergency-proofing or preparing to retire all need to be considered in your long term plan for your future. 

Retirement for Business Owners 

Retirement can be lounging on a beach enjoying the sunny weather, it might mean travelling on cruises around the world. It may also mean time on hobbies you love, time with family, volunteering or more.  

Planning this now means knowing when will be time to restructure your assets and any super you have to support you without additional income arriving into your kitty. After a lifetime of regular(ish) income, you may feel uncertain about the future.  

Deciding where your business fits into this future, and what actions you need to take, should be decided years in advance. Once you have a clear idea of what you want to do with your business in retirement, changes and updates can take time to complete.  

Once you know what you intend to do, then you need to take action to implement.  

A Cash Flow Clarity session with a Northwest Accountant will help you look at everything you currently own, or owe, and help you to figure out potential shortfalls. Seeing everything laid out in Xero can help you to understand your current financial situation exactly, and then help you to create the retirement life you desire.  

As a business owner, you have three options.  

• Close the business 
• Hand Over Management  
• Sell the business  

Closing the Business 

Your business is a huge asset, and if you have a regular bank of customers and an ongoing profit cycle, closing doors would be a costly end of a potentially lucrative asset.  You’ll need to advise the ATO, cancel your ABN and registrations, as well as sort out employee entitlements. Plus you’ll need to liquidate any assets the company may own, notify customers and stakeholders and settle debts and commitments.  

You will need a lawyer, and will definitely need your accountant!  

Hand Over Management 

There’s a lot of pros and cons to this option. You can go part time if you choose, you can keep an eye on how things are going, and you can remain active and engaged in your business as you choose to. However this can also lead to you simply… getting back into the full time (or more) hours, burning yourself out, and never getting to actually enjoy retirement.  

You’ll need to be aware of your time and resources with this option. Old habits die hard, and you may find the hours creeping up and no relief in sight. If you’re great at setting boundaries and maintaining them, this is a great way to ease out of a business and show support for your new manager.  

Setting clear legal agreements about your new role can also assist and clarify ownership of shares, duties, dividends and authority.  

Sell the Business 

Selling a business can actualise the owner’s equity, providing you with a lump sum payment for all the years of work you’ve put into the business. However this can also be the most time consuming option, as you need to ensure your business can be run by the new owners. You may need to complete a hand over period, to ensure their success. Great processes, good documentation and reliable staff all help to make this process easier. If this is your plan, building it into your internal processes well in advance will help you and your staff transition.  

Plan early for the transition, and get professional help. You’ll need to look at every process and ensure it’s streamlined and efficient, which is something you may want to do regularly as part of your ongoing CEO duties. Financial audits and written documentation are critical, so building them into your standard operating procedures will make the process easier on you as well as your staff.  

Taxes and legal requirements are going to be a big part of any business sale, so work with your accountant and your lawyer beforehand to make sure you understand what needs to happen and when for a smooth sale. They will be needed to help you navigate contract laws, capital gains taxes, tax concessions and more.   

So the answer is YES, you do get to retire. You get to pick how, when and where. If you’re not sure what the future holds for your retirement plans, or you’d like to discuss this with professionals, book a meeting with a Northwest Accountant today. Give us a call on 08 9185 9400 or drop an email to Helen at [email protected]