How to Retire From Your Own Business

by | Mar 31, 2022 | Business Financing, Financial Advice, Insights To Business

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When you own a business, all of the responsibility lies on your shoulders. Even if you absolutely love what you do, you may get to a point where you simply need to retire and let someone else take over the operations of the business. It’s a bid decision and one that shouldn’t be made in haste. Take a little time and go over all of the facts before you make your decision. Retirement is a big step and will allow you to enjoy your life to the fullest without having to constantly worry about problems at work.

Different Ways to Retire

When it comes to retiring, there are a few different ways to accomplish your goal. Some people “retire” from their business and then make themselves available to the new owners as a consultant. This allows them an opportunity to stay connected to the business they worked so hard to build without having to work every day or make major decisions. Others walk away from the business and never look back. How you handle your retirement is up to you.

May Depend on the Structure of Your Business

How you retire may depend on the legal structure of your business. With large corporations, submitting a letter of resignation so that it can be approved is often the first step. With an LLC, you may need to dissolve the corporation and sell off any assets. If you are a sole proprietorship, you have several options. You can simply close the doors of the business and retire. You also have the option of handing the business over to a family member or selling the company to someone who wants to continue operating the business.

If You Sell Your Business

You have the option to sell your business to anyone you choose. You also have the option to sell the business assets and close your doors for good. If this is the option you are leaning toward, you may need to dissolve the company before you sell it. An LLC requires that 2/3 of the eligible voters agree to the business being dissolved. You will also need to notify your state as well as the IRS. The new owners of the business will need to file for a new EIN so they can reopen the business under new management.

Retirement Plans for Small Business Owners

Before you make the decision to retire, you should have a plan in place for your future. Retirement plans for small business owners make it possible for you to live comfortably without worrying about financial stability after you retire. Retirement plans are capable of providing you with the financial support you need so that you don’t have to worry about going back to work or giving up any of the hobbies you love. Don’t rush into retirement if you aren’t ready. Many people are continuing to work long past retirement, not because they need to, but because they want to. If you truly love what you do, bring on someone that you may want to take over after your leave. It will give you time to go over some of the better retirement plans for small business owners so that you can be fully prepared when the time does come for you to pass the business on.