Among the advantages of being a small-business owner is the ability to decide for yourself how you'll handle your retirement. While many younger Americans may look forward to retirement as a time to stop working, as people grow older they often begin to see retirement simply as a change in lifestyle -- not a time to sit on the beach and cease being productive.
A recent Wells Fargo/Gallup Small Business Index survey* shows that fewer than one in five small-business owners plan to stop working and retire over the long term. While nearly two in three expect their businesses to keep going after they stop working, only two in five of these people think a family member will take over and run their businesses in the future. For many small-business owners, then, the sale of their business is clearly a significant potential source of retirement assets.
Most Owners Plan to Stay Involved
In the long run, 42% of small-business owners say they plan to cut back on work but maintain involvement in their businesses. Thirty-eight percent say they will never retire until forced to do so for health reasons. Just 19% say they expect to retire and stop working.
Most Owners Expect Their Businesses to Keep Going
Sixty-three percent of small-business owners say they expect their businesses to keep going after they are no longer working, while 34% say their businesses will come to a stop.
Most Owners Say Their Businesses Will Be Sold
Of those small-business owners who expect their businesses to continue after they stop working, only 41% think someone in their families will keep it going. Twenty-one percent of small-business owners expect to sell the business to someone or a group of people currently working for it. One in three expect to sell it to someone or a group of people outside the business.
Why Should Small-Business Owners "Retire"?
Ninety-six percent of small-business owners say they are successful, 91% say they are satisfied being small-business owners, and 84% say if they had to do it all over again, they would still become small-business owners. In sum, many small-business owners love what they do and have been successful at turning something they enjoy doing into a good living.
So is it really surprising that they don't want to stop working and retire? As they get older, it makes sense that these owners will slow down and work fewer hours but stay involved in the business they enjoy. It also makes sense that they'll stop working altogether only when forced to do so for health reasons.
In this regard, it's interesting to note that many other Americans who do not own their own businesses dream of "retirement" as a time when they can start their own small business by converting their hobby or something else they love to do into something that will allow them to maintain their desired lifestyle in retirement. Obviously, many of today's small-business owners are a step ahead in achieving this kind of "retirement" goal.
*Results for the total dataset are based on telephone interviews with 600 small-business owners, conducted Sept. 26-Oct. 6, 2005. For results based on the sample, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.