My retirement savings is dismal. Dismal. Good thing I’ve got decades to go before that becomes a consideration.
For many owners of independent PR firms, IRAs and 401Ks are only one of their worries as they reach retirement. A new survey by financial advisory firm, The Tobin Group, found that nearly 90 percent of these agency owners in the U.S. do not have written exit plans.
What’s an exit plan?
Good question. I wondered the same thing. Turns out it’s not part of the company’s crisis plan. Exit plans are how these owners plan to leave their businesses upon retirement, including who — if anyone — they will transfer ownership of the company to, and how they will be compensated by selling their stake in the business.
According to the study, more than 80 percent of owners between the ages of 55 and 79, “when most owners contemplate retiring or ‘cashing out,’” and 77 percent in the 60 to 69 age group, said they do not have written exit or succession plans.
If there is a golden parachute for small-business owners, it appears they’re not sure how to deploy it. And (to continue this metaphor) for many of them the ground is approaching quickly.
David Tobin, the — you guessed it — founder of The Tobin Group, said small-business owners should start preparing their exit plans at least 10 years before they’re ready to split. Otherwise, they’re wallets will take a hit--and so will the grandkids' birthday presents.