Are You on Path to the Retirement of Your Choice?

Somewhere inside all of us lurks "the dream."

You know the dream - the one where we retire with enough money to do as we please, regardless of cost.

Although the dream differs for each of us, it usually involves one or more of the following pursuits:

  • Traveling
  • Golfing
  • Helping charitable organizations
  • Fishing or hunting
  • Working on our investments
  • Spending time with our family
  • Running our company until our health no longer allows us to.

Unless you are planning on never retiring, you are going to need a sizable financial nest egg. You know that. I know that. Everyone knows that.

But, most of us are so preoccupied keeping our businesses going that we never fully consider whether our business is on course to create the wealth we need to reach our retirement goal.

So a question arises - "Are you choosing your retirement or is it choosing you?"

When you created your plan for the nest egg you need, (you've done that right?) what price did you assume you would get for your business? Three times net income? Five times net income?

Did you consider whether you OWN a business or whether you ARE the business?

For the sake of conversation, let's call individuals who ARE the business "self employed" and individuals who OWN the business to be "business owners."

Business owners can leave their business for days or weeks at a time without it having a negative effect on their business. Self-employed owners have businesses that cannot survive their absence.

If you are self employed, your business will be worth what your hard assets can be sold for.

Self employed owners receive virtually nothing for the customer loyalty they have created. Every prospective buyer will assume the day owner walks out the door, the customers will follow.

If your business is self-sufficient, buyers will pay for some of the future income your business should generate.

Business owners who can prove their management team knows how to run their business successfully are going to be receive the highest price possible for the company.

For that matter, the less you are involved in the business, the more your business is worth to someone else. Crazy, isn't it?

Let's pull this together. Many valid choices lay ahead for you depending on your retirement goals and investing prowess. If you are a self employed owner who is intending to work until you die, you do not need to build a self-sufficient business. If you invest your profits effectively, you may be able to live the retirement of your dreams after you shut down your business and sell off the assets. Otherwise, build a self-sufficient business or scale back your retirement dreams.

If you are like most small business owners, you haven't thought through your retirement strategy. It may be time to start. Look inside yourself and decide which challenge you are most up for:

  1. building a self-sufficient business that lets you become an absentee owner or
  2. living a middle class retirement.

The truth of the matter is that very few self employed owners enjoy a jet-setting retirement nor leave a fortune behind for their heirs.

Let's not lose sight of the difficulty of running a business successfully. Anyone who does, whether self-employed or the builder of a self-sufficient business should be considered highly successful!

Ron Roberts, The Contractor's Business Coach, teaches contractors how to turn their business into a profit spewing machine. To receive Ron's FREE Contractor Best Practices Newsletter visit