Retirement Reallity Check

When It Comes to Retirement - Small Business Owners

Need a Reality Check

What are your retirement plans? Are you expecting to sell your business and retire on the proceeds? Do you dream of passing on your business to your kids?  A new global survey of small business owners’ succession plans by Sellability Score found that small business owners’ expectations for retirement have changed. Since 2008, almost half of business owners over age 50 have delayed their retirement due to economic conditions.

Despite the delays in retirement, all is not doom and gloom. Some three-quarters of business owners surveyed say they expect to exit their company in the next 10 years, and 40 percent expect to exit in the next five years. More than half of the business owners had already owned their companies for at least eight years.  What do small business owners expect to happen to their businesses when they leave?

Passing a business down from one generation to the next is becoming less popular; just 1 in 10 surveyed say they expect to pass their business on to their kids. By comparison, 61 percent expect to sell it to an outside buyer, while 10 percent expect to sell the business to a partner or key employee.

Meanwhile, 14.5 percent plan to essentially work until they drop, and 8 percent plan to just shut the business down entirely when they retire.  When they do leave their businesses, one-third of respondents expect the sale of their businesses to fund at least half of their retirement. However, those dreams might well turn out to be pipe dreams, given that a whopping 90 percent of business owners don’t have a formal exit plan in place.

The survey findings also suggest that small business owners may be underestimating the complexity of selling a business. Just one-third say they expect selling their business to be difficult. However, the majority of businesses in the study were in service industries—which often find it more difficult to sell since these businesses are more likely to be dependent on the owner’s personal efforts to land and keep new business.

If you ask me, it’s time for a reality check. First, whether or not you’re planning to retire in the next few years, a succession plan is important for every small business to have. Not only will it make selling your business easier when the time comes, it can also protect your business should anything happen to you unexpectedly.

Second, if you’re expecting the sale of your business to be easy, you’re likely in for a rude awakening. If you haven’t already done so, start now to work with your attorney and accountant and get advice on how to build value in your business.    That way, you’ll be better positioned for a successful—and profitable—sale that will see you into a happy retirement (or a whole new venture, if that’s what you choose to do).   Do you have a succession plan for your small business?

You will find this entire article, written recently by Rieva Lesonsky by clicking on: http://smallbiztrends.com/2012/10/retirement-small-business-owners-need-reality-check.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+SmallBusinessTrends+%28Small+Business+Trends%29

SMS-4Sale Business Profile

You’ve heard the expression “you need to work on your business, not in it.”  It may sound trite, but this story, about Ron Cregier and his SMS-4Sale business, certainly proves that point.

Ron Cregier retired from the corporate world back in February 2010.  The allure of owning his own business, making his own decisions and making the big bucks sounded like the way to go.  He had an idea – to deliver mobile marketing services - and he had 35 years of IT experience he could leverage.  He thought “Everybody needs IT support.  Right?“

Well, as it turned out, not exactly.  He was confident in his technical expertise, as existing customers were pleased and other IT companies were calling him to help with projects.  His problem was that he just wasn’t building the customer base he needed to support his business.

When Ron first came to Small Business Development Center at Elgin Community College, Ron explained his business concept.  SMS-4Sale focuses on the mobile marketing environment by providing businesses with services to connect with their customers and prospects via mobile phones.  SMS-4Sale also offers a management service that allows a business to outsource their mobile marketing strategies and platform management for a monthly fee.  During this past September, SMS-4Sale launched his Mobile Marketing Club to send merchant coupons to mobile phones.

Ron’s thinking was that, unlike a mobile app that can only be used by Smartphones, the Mobile Marketing Club sends a text message with an embedded link to a mobile web page containing the coupons for download.  This approach allows the Mobile Marketing Club coupons to reach ANY mobile phone with text messaging and internet access turned on.  Conceptually, a mobile coupon is like a paper coupon, except that a mobile coupon is always available on the mobile phone, as opposed to paper coupons that are easily lost and need to be printed, cut and carried in a purse or wallet.

Ron came to the SBDC for help in sales and marketing.  Sybil Ege, Ron’s SBDC advisor, asked Ron to identify his business goals and objectives, which of course are at the heart of a business plan.  Ron had always thought it was more important to spend time being technical and staying on top of new and evolving technologies, than writing a business plan.  But as the discussions proceeded, Ron realized his technical focus was actually hurting his business, and that continuing down that path was actually one of the biggest mistakes he had made so far.  He saw that without articulating business goals and objectives, he would lose sight of what he was trying to accomplish.

These discussions were eye-opening for Ron, as it helped him look at his business from a completely different perspective.  Taking Sybil’s advice, Ron formulated his business plan.  This whole process has helped Ron better articulate what his business is all about in networking circles, and has led to increasing his customer base.  Ron is now busier than ever with 3 new clients, 3 prospects in the wings and a whole new line of businesses that has brought on 10 new clients, just in the last 6 weeks.

Love Your Local Business

Do you know a hard working small business owner who often says "If only I had a ..."?

If so, Intuit may be able to grant their wish. Between November 14th and December 20th, small business owners can submit their wishes to Intuit's Love Our Local Business program.  A total of 15 wishes will be granted in time for the New Year. For more information please visit this website.