Are Canadian small business owners heading into retirement unprepared?

According to 2008 research conducted by BMO Bank of Montreal, only one-fifth of entrepreneurs in the twilight years of running their business have named a successor. The same study found many business owners are concerned that the sale of their business won't sufficiently subsidize the retirement lifestyle they want.

"Many business owners have invested their lives into their enterprise and the prospect of separating themselves from day-to-day operations is an emotionally charged experience," said Linda Knight, President & Chief Operating Officer of BMO Mutual Funds. "But for the long-term health of their business and personal wealth, these hardworking entrepreneurs need to contemplate an exit strategy well before the exit occurs, and a financial professional can help facilitate this process."

Young entrepreneurs should begin envisioning their retirement and exit strategy on day one or as early as possible. Waiting until the last possible moment is simply too late in the game to fully maximize the potential of the business. For those in the later stages of their enterprise, getting professional help now to coordinate a succession plan, as well as to secure appropriate retirement funds, is a must.

Those business owners who are in the habit of investing much of their income directly back into their business might want to reconsider. Knight recommends a diversified portfolio that stands well outside of the business as a means of protecting one's livelihood and long-term financial security.

"If you put all your money into your business and something goes wrong with either the business or economic landscape, you could be left with nothing. Better to spread the wealth into more secure investments, such as GICs that will be there for you when you need them the most."

Whether you're just starting out or on the verge of transitioning to retirement, it's wise to get advice from an investment professional. A financial advisor can help you craft your investment profile to meet the needs of your planned retirement lifestyle and help you ensure you get what you want out of your golden years. For more info, visit www.bmo.com.

Source: www.newscanada.com