Small-business owners and solopreneurs take huge risks by choosing self-employment over conventional careers. They give up the safety net of steady paychecks, along with perks that come with working for an organized company, like stocks and shares. 

Let’s face it—entrepreneurship is a risky game. But while you can’t predict the future, you can certainly take charge of your savings. Many small-time entrepreneurs love to put their earnings and savings back into their businesses, even when they could use more financial security when it comes to their savings. Think about it—what happens if you decide to step away from work and live off your savings? You must make a conscious effort to save money so that you don’t end up in tough situations down the road. 

Don’t take risks when it comes to how you handle your money. Put your money to work for you. View your retirement as an all-inclusive investment plan—you won’t regret it! You’ll reap the payoff down the road when it really matters.

Here is how you can save for your retirement years while running a business. 

Additional Reading: Learn How Much Should You Save in Different Stages of Life to Have a Comfortable Retirement

Save money

In order to build wealth, you must save money. Make sure to save on a monthly basis and deploy the cash into different avenues of investments. Increase the amount of money you save as your profits increase. Even a tiny amount of money will grow into a significant sum over time if you save and invest wisely, which brings us to the next point. 

Invest wisely

Saving money is important but investing it wisely to preserve it is even more important. Once you are disciplined enough to hold onto the money you earn, take the next step and invest your savings wisely. Learn how to make your money grow.

Use your money in investment avenues that offer the potential for profitable returns. This includes interest and dividends from savings, dividend-paying stocks, and bonds, cash flow from real estate, mutual funds or exchange-traded funds, appreciation of value from a stock portfolio, or other assets like gold. Investing allows you to significantly grow your money over time. Such is the power of compound returns. It is never too late to invest in your retirement. 

Diversify your portfolio

When it comes to saving for retirement, diversification is key. Never put all your eggs in one basket—this is a successful ideology made popular by Warren Buffet. Entrepreneurs who put all their eggs in a single savings portfolio—no matter how secure that investment avenue may appear—put themselves at risk of losing that money. 

Parking all your money in a savings account is never a good idea. Instead, think about diversifying your investment portfolio. Invest in a variety of asset classes to reduce risk. Gold, real estate, mutual funds, stocks, and shares—consider everything. A diverse portfolio should lead to steady investment growth over time. It is also important for business owners to have an exit strategy and to take control of their debt.

Plan your exit strategy well in advance

As an entrepreneur, you should know exactly what you want to do with your business when you retire. Do you want to transfer ownership? Do you want to sell it and cash out? Having an exit plan in place for when the day arrives can save you from a whole world of stress when you finally decide to move on from your company. 

Consider your options. Some transfer ownership to their longstanding employees, while others prefer to sell to investment firms. If you plan on transferring ownership, pick and groom new leaders. Get them through the hoops of your business. When the time comes, inform your customers and employees about the move. Even if you don’t plan to retire for the next several years, keeping an exit strategy in place helps. It can save you from major headaches when the day arrives.

Additional Reading: 5 Retirement Planning Mistakes to Avoid

Take control of your debt

Businesses and loans go hand-in-hand. Not many entrepreneurs go through their business journey without some debt at some point in time. Whether you have business loans, personal loans or credit card debt, get ahead of potential problems by reducing or eliminating your debts completely. If you have debt, think about paying it off before you start thinking about saving.

Devote your resources to things with the largest potential for returns. In this case, paying down debt would be a huge step in your savings journey.

The bottom-line

Retirement has a nasty habit of sneaking up on people. Get ahead before it sneaks up on you. It is never too late to save and invest, however, the longer you wait to plan for your retirement, the less choice you will have about how and when to invest. This will also give you limited options of how and when to step away from your business. Consult a financial advisor today to make your own choices about your financial future.