Sadly, most remodeling business owners will either never retire or will eventually shut down their business after their physical and/or mental health fails. I don’t think they plan for it to happen that way. The fact that they never proactively planned for retirement is probably the most common reason they never will be able to do so.
How about you? Will you be able to retire someday by your own choice and planning? Or will you plan to work until you either can’t anymore, or you die? I do admit when I ask, there are many remodeling business owners who say they want to work until they can’t. Having that choice is one of the great things about being a business owner in America.
On the other hand, I have a suspicion that many of those who claim they want to work until they can’t simply say so because they have no idea how retirement could be possible for them. If you are looking for some insight on how retirement can be a reality, read on for some advice and suggestions. This article isn’t all-inclusive and won’t make it happen for you, but it could help you get things moving in the right direction.
This Is a Tough Business to End
One important consideration about retiring is that, unless you can sell your business to get away from it, you may need to close your business down to do so. Keeping staff in place until you close your doors may be challenging or impossible if they get wind of your plans. Customers may not want to work with you if closing your business down means no one will be around to make good on warranty work.
Ask yourself if you’ve been concentrating on larger projects, and whether you’ve had a new one start as you close out another in order to help keep the machine going, overhead expenses down and cash flow healthy. If that is the case, trying to close your business down as you wrap up a last project could eat up lots of your savings. On the other hand, you could transition to all subcontractors, or you could purposefully reduce project size as you near retirement so even if all your staff is gone—as long as your health is still good—you could wrap things up yourself. If this is your plan, it might be a good idea to keep your retirement a secret until you’re actually retired.
Are You Contributing to Your Retirement or Your Clients’?
I truly believe many remodelers will never be able to purposely retire because they simply can’t afford to do so. By guessing at what to charge and never understanding how retirement planning or remodeling financials work, they undervalue their services and, therefore, work for not much more than the wages they need to just get by.
Many other remodelers are afraid of money. They are afraid to ask for it, afraid to talk about it, and many even feel guilty about earning a real good living. If I am describing you here, I suggest you decide whether you should start charging enough so you and your other half can retire, or if you will save your clients a lot of money so they can still afford to hire you to work for them after they retire.
When those customers tell you that you’re too expensive, remember everything is relative. Perhaps you’re just too expensive because they are watching and budgeting their money as they save for their own planned retirement. Are you doing the same watching and budgeting, or will you simply make excuses for why retirement is not an option for you? Think of that the next time you price a job or offer to do all the work of preparing a proposal for free.
Find Other Sources of Income
In addition to charging enough money as a remodeling business owner so you can save for retirement, I suggest you also find ways to help your savings grow. Of course, you could save that money and earn interest and perhaps invest it in the stock market. Those are wise options for most people. I also suggest you consider additional streams of income— both now as you save for retirement and for after you have already retired.
I invested in rental properties and raw land. The rental properties carried themselves through the rents tenants paid and, now that the tenants have paid the mortgages, I own many properties outright. I can both keep them and collect the rents, or I can sell them and spend the equity on my retirement. The raw land has appreciated over the years and is likely to keep doing so. If I need or want more money in retirement, I could sell some of it. If I die before I need the money, it’s great to know my kids will be well off. Either way, I won’t be looking to them to pay my bills in retirement.
One last thing: If I have been describing you here in any way, I ask you to think about the real reasons you might never be able to retire. Maybe you just need the right kick in your butt to change your view and attitude. If reading this article hasn’t done it for you, consider sharing it with your other half—your spouse or partner. If you have the guts to do so, you may either get help confirming it just can’t happen, or perhaps someone will give you the kick you need. QR