Aug '23 in General discussion
How To Setup A Retirement Plan For Your Small Business
Here’s my official bullet point list (I’ll go in detail on each)
- Roth IRA (usually too late for most)
- Seller finance exit
- Horizontal integration
- Vertical integration
I promise this is relevant
Retirement plans are usually not thought about until it’s too late.
Most content out there talks about how to set it up for your employees
But what if you’re the only one!?
What if YOU need a retirement plan for your business.
You can’t just burn the candle at both ends forever
If that’s you, then this post is for you
I’ve had the pleasure of seeing what a lot of small business owners do to build something that removes themselves and keeps the cash coming in.
Here’s my explanation of them in ordered format.
Roth IRA:
I’m not a financial planner and there’s tons of content out here to set this up so I’m going to link to actual experts on this one.
Seller Financed Exit:
In simple terms, it’s where you sell your business. However, instead of it being in one full chunk, it’s a deal where you “finance” the deal yourself and get paid out as time goes on.
This is very popular for a buyer, but not so much used by sellers. Mainly because you want that big payout.
Truth is, your business may not be worth that much. Or, it’s not looking like a hot deal to sell all at once.
But, with seller financing you can be flexible. Imagine selling your business and cutting a deal where to get 10% net revenue paid to you every month for the remainder of the life of the business?
Sounds like you just made up your own pension plan.
Interesting?
Yes
Easy?
No.
An option though? Definitely.
Horizontal integration:
This is where it gets interesting. Imagine you have a local notary business.
Or real estate business
Or insurance business
Or fingerprinting business
Whatever it is.
Think of this; what product or service can you integrate that’s like your business, but not totally on par with it.
Fingerprinting does that for most people in that group. But how does it make you that “retirement money”
Well, in my experience you just need to set it up the right away.
Fingerprinting is a recurring service with a never ending flow of clients.
It’s great in any economy
It pays the bills and has high margins
And it’s very low competition
So here’s the elephant in the room.
How do you retire with it?
How do you not be the one to do the work but still make the money from it.
That’s where we take step two.
Horizontally integrate and then outsource.
Branch into a new market or service horizontal to yours.
Replace what you’re making now
Replace the labor with someone who can be trained or certified to do it.
Poof!
Retirement plan from horizontal integration
Vertical Integration:
Now this one is almost copy and paste to horizontal
But!
Instead of going to a different market, go up or down market
Let me explain
Are you a notary or loan signing agent?
Make a signing service and go up market
Or
Start selling notary stamps and go down market
Are you a fingerprinting business and need to retire yourself out of the day to day?
Sell fingerprint cards yourself and go down market
Start a customer service phone support business using your niche knowledge and go up market.
But how do you retire yourself out of it?
Same option as previous
Make the product or service, gain the new revenue and replace yourself as the labor
Boom
Retirement achieved
Now I know retirement plans aren’t a sexy topic.
I just see so many people looking to use these methods to plan for retirement or do the same thing retirement plans accomplish.
Money for life!
And that’s why I think fingerprinting is one of the better options
It may not make you a million bucks
But it darn sure will get you that retirement like money on a recurring basis
Especially if you learn the skill, gain the revenue and replace yourself as the labor.
Comment the word “ME” if you like this type of content and want more of my thoughts on topics like this.
I’ll share what I can :)
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How To Setup A Retirement Plan For Your Small Business
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