The landscape of retirement planning for small business owners presents a complex picture. Compared to employees who may have access to 401(k) plans or pension benefits, entrepreneurs are tasked with funding their own retirement. And, unfortunately, saving for it can be challenging due to a fluctuating income or insufficient profits; many even end up having to use what funds they do save to invest in their businesses.
According to the US Chamber of Commerce, entrepreneurs often put off creating a business exit strategy until they are close to retirement age. In fact, a recent survey revealed that approximately 25 percent of small business owners lack a retirement plan altogether. Fortunately, there are several simple steps you can implement now that may help you secure the golden years ahead.
One of the most crucial components of achieving a successful retirement strategy is creating a solid support network of professionals, which may include a certified public accountant, a financial advisor, and a business or tax attorney. Their collective knowledge can guide you through the various complexities to better ensure you have the right plan in place and that nothing has been overlooked.
Consider where you see yourself in five, ten, or even fifteen years, factoring in both your personal and professional goals. Do you aim to sell your business when you retire, stay involved during the transition to new leadership, or hand it over completely? Do you want to stay where you are or sell your home and move closer to family? Your retirement vision will significantly shape the decisions you make today, so by clarifying your long-term aspirations, you can customize your approach for a more fulfilling future.
There isn’t a universal solution when it comes to retirement planning, especially as an entrepreneur. You’ll need to select a plan that caters to your business type and aligns with your time frame, lifestyle, and overall risk tolerance. For example, if you own a business with employees and want to save aggressively, a safe harbor 401(k) may be the way to go, while if you’re a sole proprietor looking for something simple, a traditional IRA might be ideal.
Each option offers various flexibility regarding aspects such as the yearly contribution amount and allowable withdrawals, which can make deciding on the best one for you difficult. This is where working with a financial professional comes in handy. They can assist you in researching and identifying plans that work with your health and life insurance policies, employee retirement plans, and practical strategies for diversifying your investments.
A detailed exit strategy can serve as a road map for driving your business to accomplish its long-term objectives and facilitating a smooth transfer of ownership. Whether you choose to pass your business on to a family member or sell it to an employee or outside buyer, you’ll need to anticipate the timing of this transition and resolve whether you want to remain in the business for a period once the baton has been passed or step away immediately. Begin formulating your exit strategy at least a few years before you want to retire, and put your focus on enhancing your business’s profitability as much as you can in the meantime.
If you want to sell your business when you retire, having well-maintained records is essential. Potential buyers will likely want to see your most recent financials (from the past three to five years) to assess the viability of your business, so you’ll need to track and manage your data consistently. This means recording all sales and expenses and reconciling your bank and credit card statements monthly to catch and correct any errors or omissions. Meticulous recordkeeping can also help you determine an accurate valuation of your business when it’s time to sell.
Calculating the exact value of your business for retirement planning can be complex due to the many variables that can affect its worth at the time you’re ready to transition. If your goal is to help finance your retirement through the sale of your business, seek advice from a business valuation expert, who will assess your current sales and assets along with market trends to forecast its potential value several years down the line. With this guidance, you can avoid overestimating or underestimating how much you may be able to get from the sale. However, keep in mind that this estimate is subject to change, so you should never count solely on selling your business to support you during your retirement years and always have other contingencies in place.
In an economic downturn, your business’s value may be affected, potentially jeopardizing the funds you may be relying on for your retirement. Find ways to put a positive spin on the situation, such as by using it as an opportunity to demonstrate to potential buyers how your business has weathered similar economic fluctuations over the years. You could also explore options like a partial or leveraged buyout or an earn-out arrangement—in which a portion of the purchase price is paid up front based on your business’s performance and valuation—opening the door to additional payouts when both you and the buyer achieve mutual financial objectives.
Retirement is a deeply personal decision that hinges on a variety of important factors. By planning ahead and considering each one, you can create an approach that may allow you to sail smoothly into your golden years.
TAKE ACTION:
Define your retirement goals, and develop a clear succession plan to protect your assets and future financial security.
For entrepreneurs and business owners, the journey of building a company is a labor of love. But like with other types of relationships, sometimes that passion can get pushed to the background by day-to-day responsibilities. This month, reignite the spark by showering your enterprise with extra care and affection. Here are six ways to do so that can help ensure its resilience, growth, and prosperity in the months ahead.
The key to any meaningful relationship is avoiding taking it for granted, so make the time to revisit your core reasons for launching your business. This reflection will remind you why you started your entrepreneurial journey in the first place while also offering insight into how closely your current operations align with your original purpose. If you notice any deviations from these foundational goals, you can adjust your business plan and strategy accordingly so they reflect both your passions and overarching objectives.
Demonstrate your commitment to your business by investing in your own growth. Consider enrolling in courses, workshops, or seminars to enhance your skills and knowledge in areas critical to your industry. By continuing your education and staying up to date on the latest trends and practices, you’ll be better equipped to lead your business toward innovation in the coming months and years.
This investment in learning should also extend to your team members—it’s equally vital to the success of your business that they stay sharp. Give them the opportunities and resources they need to advance their professional development, including access to online courses, networking events, and training programs. These can empower your team, helping them to thrive in their roles and further contribute to the overall growth of your organization.
Beyond providing them with avenues for professional development, make the effort to show your employees your appreciation for everything they do. Send an email thanking them for all their hard work in the last few months, or have a meal catered to the office. (For remote employees, send out vouchers they can redeem for lunch.) You can also host a fun team-building activity like an in-person or virtual escape room. Whatever route you choose, the goal is to make sure your team feels valued, not just this month but throughout the year. Such gestures can go a long way toward keeping everyone positive and motivated to reach your company’s goals.
It may be early in the year, but it’s not too soon to review how your business is doing financially. Consider scheduling meetings with your team leaders to evaluate your progress so far. If you find that you’re falling short of your Q1 targets, collaborate on how to make necessary adjustments to your business plan for the year. Taking a more proactive approach will enable you to align your strategies more effectively with your objectives.
Furthermore, a financial checkup offers an opportunity to identify where you can streamline operations and cut unnecessary costs, ultimately enhancing your organization’s overall efficiency. This could involve renegotiating supplier contracts or automating repetitive tasks. By reviewing your financials now, you can uncover areas for possible improvement and act promptly, positioning your business for success in the coming months.
Marketing is one of the most important parts of any business, so if you haven’t updated your online profiles in a while, now is a great time to review them. Check that your branding is consistent across all your social media accounts, including Instagram, X, LinkedIn, and TikTok, as well as on your Google and Yelp pages. This will help you develop better brand recognition. Also, ensure the information on them is accurate and reflects your organization’s current services and products so potential customers have the most up-to-date information when searching online. (For more social media tips, see the interview with expert Blair Kaplan Venables in this issue.)
Your customers are the lifeblood of your business, making it essential to nurture your relationships with them. Reach out to your most raving fans with personalized messages of appreciation, thanking them for their continued support, and consider running special promotions or offering loyalty rewards to show your gratitude. Moreover, actively seek feedback, and use it to improve your products or services. Building strong customer relationships will not only foster brand loyalty but also drive the word-of-mouth referrals your business needs to truly thrive.
No matter how you choose to show your company love, the extra effort and care can lead to a flourishing enterprise. After all, your business is your baby, and it deserves to be treated well both this month and throughout the year.
TAKE ACTION:
Use one or more of these strategies to give extra attention to your organization this month.
Social media and PR expert Blair Kaplan Venables discusses the importance of both social media and resilience.
Tell us about your personal and professional journey:
It’s quite the ride. In 2008, at age twenty-three, I left my corporate job at Lululemon and started a public relations company, applying my knowledge to the digital space. At the time, social media marketing wasn’t a profession, so I quickly became a thought leader in this new medium and brought some global brands along with me.
My personal story is a little heavy. My dad was a brilliant gemologist but developed a serious drug addiction, and when I was seven, he left us. Thankfully, we reconciled in my twenties and developed a beautiful relationship. But at the end of 2018, we learned that he was terminally ill. I talked about it to anyone who would listen, and people responded. So in March 2019, I founded the Global Resilience Project and started gathering stories of resilience from around the world, which turned into a best-selling book three years later.
During that time, my resilience was tested even further. Not long after my dad’s diagnosis, my grandfather died—and on the way home from his funeral, my husband and I got into a car accident, which resulted in me suffering a brain injury. A few months later, my husband had a heart attack and needed quadruple-bypass surgery. Then, within the next two years, I miscarried and my father-in-law and mother both suddenly died; about a year later, so did my dad.
I could have quit—but I kept going. I learned that my superpower is helping people tell their stories, both through social media and through the Global Resilience Project.
Are public relations and social media now inextricable?
When social media first emerged, people constantly asked me what it was. I always said I did “social media PR” because of my background, but it was really social media marketing. Today, a lot of social media is public relations, a tool much like an article in Forbes or an ad on a billboard or the radio. It’s a place to manage perceptions and edutain, where you can let people in and build trust.
What should business leaders do to win the competitive social media game?
Step one is defining what success looks like to you: What is winning? That answer is different for every business. For example, when I was driven by money, I was unhappy. I realized that we’re not meant to be on this earth just to work; I wanted to make a difference with what I did. So making tons of money isn’t my number one goal anymore—impact is. I’m obviously aware of my sales targets, but when your impact goal drives your decisions, money will follow. I encourage my clients to think the same way.
Similarly, there’s more to social media than just posting and sales. It’s also about allowing people to know you so they want to follow you.
Can businesses fail simply by not doing this?
Yes. A lot of times on social media, you just see the tip of the iceberg—the professionally curated image or video. That’s great, but people want the real story: to know about all the blood, sweat, and tears that go into everything you built. If you have a hundred people on your team, let each one be spotlighted. Show the world those who make your business what it is.
How can a company ensure the best return on social media?
Set measurables like KPIs. If the needle isn’t moving, you need to change. Also, it’s important at the point of transaction to ask, “How did you hear about us?” or “Do you follow us on social media?” There must be an ongoing conversation with your community about how things are resonating and if they are engaging with your content.
Then there are the algorithms. I suggest forgetting them and posting what you want, when you want, and how you want. After all, what you’re doing might be working well . . . until suddenly the algorithm changes. So you’re doing the exact same thing, yet it’s no longer “working.” Instead, you should focus on adapting to the rapidly changing needs of your followers—what works for them today is probably not going to work in a couple of days.
Finally, as a leader, you need to see everything that’s possible or you’ll miss out. Some people at the top of an organization may still think in old ways, such as “No TikTok for us.” How adaptable is that?
In your experience, what can impact an entrepreneur’s resilience (and hence performance) the most?
For everything you do in life, you need to show up as you, whether it’s as a business owner, a parent, or a friend. But you can’t pour from an empty cup. When I started out, I worked fourteen hours a day, seven days a week. That’s not healthy. I learned that if I’m not taking care of myself, I can’t take care of my clients. I make that a point of emphasis when I talk to businesses.
Where do you want to be in the next five to ten years?
I see myself traveling the world speaking to groups of children, adults, business owners, and organizations about how to be more resilient; my goal is to empower eighty-eight million people to do so by August 2025. My story is also going to be featured on Apple TV and potentially Amazon Prime, which will help me reach even more people.
Ultimately, I want people, especially entrepreneurs, to know that it’s OK to not be OK. Admitting that is not a weakness; in fact, it’s brave to be vulnerable. Entrepreneurs choose a path less traveled, and it can be a lonely journey. But there are lots of us out there battling the same battles, and others can lift you up along the way.
For more info, visit blairkaplan.ca
TAKE ACTION:
Review your company’s social media methods to make sure they are resonating with your customers.
One of the first things you learn when starting a business is that there will always be someone else doing exactly what you’re doing. The good news is that it doesn’t matter, so long as you can differentiate yourself—and one of the best ways to do so is by building trust through incredible customer service.
In most cases, a customer who trusts you will not only keep coming back but also tell their friends and family about you, sending more prospects your way. But earning that trust takes more than a single positive transaction; it requires repeated actions over time that showcase your humanity, deliver immense value, and present you as the authority in your market.
Incorporate the following tips into your current business plan to build a solid foundation with new clients that will encourage repeat and referral business.
Building customer loyalty starts with your employees. After all, as the people in front of your customers every day, they are the faces of your organization. So if their work environment isn’t based on trust, how can you expect them to promote it with new clients? That’s why leading with a people-first mentality in all areas is so essential—it will create an atmosphere of authenticity and put your business in a positive light.
The key is to set very clear expectations for your staff, such as by giving new hires a playbook of dos and don’ts when interacting with customers, driving home your company’s mission and where each employee fits in it, and empowering them to be their own decision-makers. An employee who feels trusted will be better prepared to inspire trust in your organization.
You and your employees know your business’s core values and goals inside and out, but your customers should too. Let them in on what makes your organization tick, and they’ll reward you with their confidence in return.
Is your company a family-run business with decades of experience serving people in your area? Did you develop the concept for your business out of personal difficulties or triumphs? These are all details that will humanize your company to your clients and endear you to them as its leader, which will, in turn, help develop their trust.
One avenue for highlighting your mission and values is through your website. An “About Us” page can be a great way to share your story in your own words. If you haven’t done so already, consider taking some time to write down your company’s journey and add it to this page on your site.
Another option is to create marketing pieces that emphasize your values. For example, if your primary focus is helping people plan for their retirement, you could post a “Retirement Tip of the Day” to your socials and offer a free retirement planner in a monthly client newsletter.
Proper communication is essential to so many areas of business success, but it can be particularly important when it comes to gaining the trust of your clients. Nothing sours a relationship quicker than a misunderstanding.
To ensure that you and your employees can avoid this costly issue, craft well-established parameters for how to deliver your business’s message and services. Clear and concise pitches and scripts, for example, can help your salespeople overcome objections and effectively communicate value. They should be able to succinctly repeat back the customer’s pain points, describe how they can solve them, and outline a plan for doing so—without overpromising or underpromising.
Don’t underestimate the power of follow-up either. A single interaction with a customer is seldom sufficient to earn their trust or secure future business. A well-organized CRM can help you keep a record of all your customers and their important details, like anniversaries and birthdays, and track the status of your last communication with them to ensure that too much time hasn’t elapsed since then.
So how often should you be following up? According to Steve Pappas, customer-service expert and host of the Science of CX podcast, the right amount of follow-up depends on where the customer is in the sales journey. Generally speaking, a new-to-you customer will benefit from frequent communication more than a longtime one, who may grow tired of daily emails. You’ll also want to respond to customer concerns promptly. Even if you can’t solve all their problems immediately, taking the time to address a complaint will make sure they feel heard and show that you’re not sweeping it under the rug.
We’ve covered a variety of ways you can provide a good customer experience that will make your business more likable and trustworthy. But what if good isn’t good enough? In competitive markets, exceptional customer service is what’s going to help your business grow.
Here are a few key ideas for taking your customer experience to the next level:
If you can earn your customers’ loyalty, you’ve hit the jackpot. Implement these strategies, and watch as your business grows to new heights.
TAKE ACTION:
Consider your current business plan to identify areas where you could improve to build customer trust.
