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Are you making the right choices in small business?

By September 9, 2016March 15th, 2019Business, Planning, Retirement, Uncategorized

The “control freak” in most business owners ,is probably why we are in business for ourselves in the first place. As a small business owner myself for more than 30 years, I have first hand experience of the ups and the downs that this most interesting of endeavours can bring. The excitement of success is too often followed by the grind of maintaining momentum, and of course the inevitable paperwork.


We tell ourselves that no one cares about our business like we do, and this is true, but we are often so close to the action that we can not see what is blindingly obvious to an external observer. In my experience this is most common when it comes to how the business impacts on the financial health and well being of the owner and his family.

A recent study by The American College, a nonprofit financial services educational institution, shows that:

  • Six out of ten small-business owners have not consulted with a financial adviser
  • Three out of ten small business owners have not estimated how much capital they will need to have a comfortable retirement
  • Fewer than one-third of small business owners have a formal financial plan for managing income and expenses during retirement
  • Fewer than a quarter have a formal plan for transitioning their business to new management and ownership when they are ready to retire

I would add a couple of my own to this list

  • Few business owners maintain adequate separation between their personal or family finances and those of their business (for my take, check this article)
  • Many business owners do not adequately remunerate themselves for their efforts, thereby reducing the ability to adequately make provision for the future.
  • Most business owners do not recognise the risk they are exposing themselves and their family to by tying their entire financial future to a single asset, the business.

Its all well and good to be passionate about your business, I understand that. It is also human nature to focus on today rather than tomorrow. I have many conversations with people from all walks of life on precisely this issue. Small business owners face a particular challenge because the “today” is both immediate and urgent, and for some, no-one else can deal with it.

There will be life after business, or at least there should be. We need to remember that being in small business was and is a choice for us. It has not been forced upon us, nor is it a life sentence. If we are truly great at whatever vocation we are pursuing, we will be successful as an employee or as a business owner, the decision to pursue that vocation in our own right is the one that I and probably you have taken, but we chose our path, and we can choose to leave it. It is the timing and circumstances of that departure that we need to prepare for.

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