4 Barriers that keep Business Owners from Retiring

We agree there are many reasons for being in business.  Freedom of designing your own lifestyle.  Unlimited earning capacity.  Being your own boss.  Creative opportunity to innovate in your industry or field.  Sealing your impact on local or wider community.  Enjoying some perks or tax benefits along the way too.  Ultimately arranging a prosperous exit into full retirement.

For years there are more reasons to stay in business than to retire.  Eventually however, reasons to retire grow larger.  Seeking personal freedom.  Wanting less anxiety and pressure.  And of course precious time for family, travel, and personal enjoyment.  A well-prepared business shows your care and foresight whether transition ultimately leads to family successors, employee buy-out, former competitors, colleagues, or strategic investors.

When retirement hits your radar as a personal goal, you need to overcome 4 barriers that keep business owners from retiring.  Especially you want to know that your business, team members, and personal finances will all contribute to a healthy and successful transition.  So let’s listen as your colleagues describe their readiness – or the lack thereof – so you can overcome four of the key barriers to retiring safely.  (And by the way if you are a potential acquirer, this could hold valuable insights for you too.)

1.     Inadequate value in the business

In a recent Scotiabank poll 17% of small business owners say their security for retirement will primarily come from selling their business.  83% believe their business will contribute modestly (or not at all) to their eventual retirement.  This is sad!  Wouldn’t we think people would build a business not just for the income today but also for a significant pay-out at the end?

There are vigorous strategies to create and to extract the optimal value you want from selling your business.  For more on Exit Strategies for your Business click here, or attend one of our business seminars, and also explore chapters 2 and 5 of A Lifetime Of Wealth – And How Not To Lose It (Amazon).

Pic Barrier -- can u break thru2.     Insufficient retirement savings

In the same poll 25% of these business owners say their primary source of income will be registered tax-sheltered savings plans (RRSP, LIRA, TFSA, 401K, IPP, Holdco strategies, etc).  Remarkably 75% deem their retirement savings too modest to retire.  Through the years they perhaps invested everything into the business.  Or some have spent salary and dividends as if there were no tomorrow.  Yet tomorrow comes, as we now see.  And you want to enjoy all your tomorrows!

How soon do you wish the freedom to retire?  If you haven’t diversified and built your strategies for a safe and successful retirement, what are you willing to do now?  Do you have at least 3 years, and preferably 5 years or more so we can design and optimize your retirement planning?

3.     Unsure how to invest for Income

Entrepreneurs and business owners know how to draw income from business.  What scares them is feeling unsure how to draw a sustained income from savings.  Two nightmares haunt them here.  One is if they get fixed returns of 2% to 4% and run out of money in their 70s.  The other is stock market returns that can drop 30%, 45%, even 60%.   Either scenario can lead to tragic and lasting poverty when we’re older and have ongoing needs.

Clarity and confidence of Life Income Mandates (see Life Income Mandates) secure Income and indexed Growth over the years ahead.  LIMs drive strong income – with rich tax-advantages – yet at 1/4 to 1/3 of volatility in the raw stock market indexes.  This is a strong feature of Guaranteed Income for Life as derived from worldwide and diversified sources of dividend income, infrastructure income, real estate income, fixed-income, & high-income annuities.

LoW 5-year low-risk chartA five-year period including the 2008/2009 world-wide meltdown offers the following example of Life Income Mandates results measuring especially low on risk (see the scale here) and high on sustaining income:  

Securing a life-long income plan can give you permission to retire, to dream, to design and enjoy the life you choose.

4.     Lacking a written Financial Plan, personally and in business

Various sources agree, 80% of entrepreneur business owners lack a clearly written succession plan.  If you realize that your business is a legal money-printing machine, would you leave it at the curb when you’re done?  Wouldn’t you want to sell this business for top dollar?  …in a time of good health, strong economy, and as a “going concern” that someone can lift to a higher level!

Delaying until a product is waning, competition is increasing, or an illness or death occurs, your money machine could be worth nothing.  (This acute loss also hits your team and your wider community.)

Lacking a written plan for yourself and your business, how will you be able to optimize personal life goals and retirement?

Eureka …a personal moment

A special moment arose when "Tom" realized he could postpone such issues but he could never buy back the years.  If his product and service didn’t wane, if competition didn’t leap ahead, if weather didn’t change, if his market didn’t fall, if health continued and if key persons stayed …then he might reach the deal he wanted for his business.  Yet failure among any such factors could threaten losing the life and freedom he wanted to enjoy.  Even so he couldn’t buy back the time lost in procrastinating his retirement dreams.

Time passes.  Luck comes to those who have prepared.  The reason you and I want to connect on this is to integrate your personal and business planning – together with your existing advisors and resources – so we can see the way clear to the retirement lifestyle you want to be enjoying.  Will you reach me today, and let’s secure your freedom to retire as you choose.

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Amazon: “A Lifetime Of Wealth — And How Not To Lose It.”
Brian Weatherdon,  MA CFP CLU CPCA MDRT
905-637-3500 x 223   Brian@SovereignWealth.ca 


  1. Brian, you have touched on the key barriers faced by the self employed with well documented statistics. On all accounts I agree with your findings, particularly about how to invest for income (#3). Emphasizing about having a written financial plan (not to be confused with a business plan) both for your business and yourself is strategic Without one it is similar to sailing across the ocean without a compass.

    As you say, luck comes to those who are prepared.

    Thank you for sharing your insights and wisdom.


  2. Brian, excellent work here. I’m glad to see that a fellow professional is noticing similar trends that are holding back the legacy of hard working entrepreneurs.

    We are clearly on the same page as I just published a similar article today on “5 Fears That Jeopardize The Future of Your Business”. I feel it is a great companion article to this one, here is the link:



    Ken Davidson, CA

  3. Thank you Ken for your note; yes I was thrilled seeing your article this morning too. Something in the air, that this is such a vital subject and we need to address all sides of it. Eliminating the 5 Fears, and overcoming the 4 Barriers, will protect business owners, family members, staff and business associates, and the entire value of business throughout our communities.

    What’s more …the preparation for an effective business sale can also increase the bottom-line results and rewards. We will surely say more about this along the way too. Preparing sale isn’t closing the door; it’s opening wider opportunities pre- and post-sale. 🙂

  4. Well written Brian, and an issue well articulated for private and family business owners. It is also difficult to contemplate such a life change when the day-to-day ‘busy-ness’ is swirling around you. And even more difficult when you are uncertain about the exit process, how to approach it, or the time it will take (over and above your current busy-ness). We know with aging demographics that this issue will only grow as more business owners look towards retirement in the next 10 years. Your #4 in particular resonates with me – the planning. The question is, will their exit be a planned, orchestrated ‘Lucrative Exit’, or simply a impromptu or unplanned exit triggered by inevitable life-changes of death, disability, divorce, or family dissent (unfortunately the most common ‘default’ exits). Well done Brian!

  5. Brian , great points made and as always excellent insight into what individuals should be aware of.
    It is difficult to imagine or visualize retirement for some but planning for that time is a must and comes sooner than you think. It is always a work in process and should be on your to do list constantly.
    Keep up the great work Brian and invaluable information you share.

  6. Brian – You have hit upon my usual mantra of the necessity of planning for business transition, and your point is very well taken that the planning has to be integrated with personal planning. The prevailing wisdom is that planning for business transition should start 7-10 years before the event, but a strong case can be made for starting the planning for an exit strategy on the day that the business is started. Everyone is going to sell their business eventually. The only question is whether they are going to do it voluntarily in a manner which helps them achieve their personal goals, benefit their families and give CRA as little tax as as possible, or involuntarily due to illness or death and leaving a mess behind them. Keep getting the word out.

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