There is always the chance that a small business may have to close unexpectedly and the owner is left with no income and retirement savings are all that is left. I was called to meet with a small business owner that had to close his business 9 months ago. At age 64 his concerns were many, including not being able to find a “job” and living off his retirement savings for the past nine months. The scenario is even worst, he borrowed on the equity in his home to finance his business and with the drop in value his equity had almost disappeared.
It is to late to go back and resurrect his business. My main concern is the immediate future and the preservation of the remainder of his retirement savings. The following is a plan I will present to him tomorrow afternoon:
- creating a “bare bones” survival budget for the next 12 months. That means eliminating most non essential items and help him implement a change in life style for he and his wife.
- Once a base budget is established the next step is to analyze opportunities that can help him earn the necessary survival income. Having survived in business for almost four years, we will go through his contact list, or develop; one if one is not available, and design an employment seeking approach.
- At the same time he will create a list of things that interest him and a list of his strong qualities.
- As the immediate goal is to stop the bleeding, I will challenge him to find some type of work within the next 30 days. It may not be the ideal employment, but at this point the spending from his retirement savings has to stop.
- Pride may have to be swallowed and if his “friends” abandon him, then they were not friends to begin with.
- We will have a weekly action plan for the next 30 days with daily phone calls (5-10 minutes long) to cover the days events and an hour meeting each week.
There is no magic to this method, but it is one that, if followed, can save someone from losing their home and perhaps a family.
A section inf my “The Be Prepared Book” ask this questions,: what happens if I lose my job?
Always work towards the best and be prepared for unexpected happenings.
Have a Great Day!