How many of us know what our business needs to achieve to deliver against our personal goals in the long term?
We all know that the state pension will be unlikely to meet our retirement needs in full. Most of us will be looking for our businesses to provide a safety net of income/capital value to make sure our retirements are secure.
However, as Steven Covey says you have to start with the end in mind. This means that you have to plan NOW to ensure you get out of your business what you need for the future.
If, like me, your business is largely centred on you as an individual your business is unlikely to be worth very much to someone else when you decide to stop. This means that your business needs to earn enough for you to make decent pension contributions now to fund your retirement.
If your business employs other people to deliver the product/service then you may be able to sell your business to realise value when you retire. However, you can only maximise this value if you start to plan several years ahead. It is vital that you can distance yourself from the business and that it can run without you, for example.
Whatever your goals it is never too early to start positioning your business so it is in the best position to meet them. If you don’t, you may find your retirement dreams end in cash strapped nightmares.