You may not have thought of this but like many of you not only am I a financial adviser, but I also operate a small business. Like most small business owners I spend a great deal of my working life inside the business trying to satisfy the needs of clients, and not really focusing on the bigger picture.
One of the things that we all face is that a business is something which can be all-consuming. It is something that can become so much a part of our lives that we stop thinking about too many other things. For example, most business owners never consider life after business. In some ways I am as guilty of this as the next business owner, right now I can’t imagine retiring from this business and disappearing down a golf fairway (or more likely off it) any time soon. I spend most of my waking hours thinking about the business, and I must even confess to dreaming about it sometimes even when I’m not awake.
Where I am different to some business owners that I encounter is that I have a choice, at least financially, as to whether to continue in business or not. My family’s financial future is secure whether I continue to work or not, and for someone approaching 60 years of age, that is a very comforting thing. In my view, it has been my choice to be in business for more than 30 years, and it will be my choice to leave it. I find myself in this position because very early on in my career I observed a number of business owners who had no choice but to continue to work, as their entire plan for life after business (and there will be one you know) was bound up in the ability to sell their business.
Sometimes this is just not how things pan out. Consider the following:
- Video Store Owners – Netflixed
- Record Store Owners – Spotified
- Photo Labs – Digitised
- Bookshops – Amazoned
- Taxis – Ubered
Not all of these businesses are completely gone of course, but their values have plummeted, and once they commanded huge prices.
Our own industry in financial advice is undergoing a significant amount of disruption. Recent announcements by AMP that they would no longer pay 4.5 times revenue should an adviser wish to exit, and that this would be reduced to 2.5 times meant that the retirement plans of many were cut in half if that is all that they had. Spare a thought for those who had borrowed significant amounts of money to buy their income stream – at 4.5 times – on the understanding of a guarantee that they could sell for the same value.
As a business owner, you should not have to expect anything less in terms of retirement than any other person who has been working for the majority of their life. In fact, you have probably invested so much time and effort into your business that you should be entitled to be able to enjoy the fruits of that labour more than most. The only way to ensure this is to consider life after business as early as you can and to begin to make provision. Small amounts often over a long period of time can make all the difference.
If all of this seems like something you can deal with tomorrow when things get a little less busy, imagine going home to your family and telling them that your business is now worthless and that you will be reliant on government support for your retirement. Consider what it would be like to have to go out and get a job in your late 50s because you hadn’t accumulated enough outside of the business when you closed the doors. Imagine working in your business into your 70s when you no longer felt passionate about it like you do now because you had to. If this makes you feel a little nervous, why not start preparing to give yourself a choice today, one day you will be glad you did.
The views expressed in this article are my own and have no official standing whatever to the living or the dead. If you like this article why not share it? I appreciate your support. Be sure to visit our blog again for this and other articles. If you have any thoughts, comments are always welcome! Why not connect with me on Social Media so we can continue the conversation.