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22 SEPTEMBER 2017 ■ www.CPAPracticeAdvisor.com NICHE PRACTICE BUILDING YOUR 5 Retirement Tips For Landscapers By Harold Fox According to a TD Bank survey in 2015, 47% of small business owners do not have retirement savings and 25% simply plan on closing their doors when they retire. Additionally only 51% had business management experience or expertise when starting their business. TD's survey was done on businesses with fewer than 100 employees and less than $5 million in sales. Many business owners count on selling their business to fund their retirement. That is putting a lot of eggs in one basket which is not advisable. Business values can often fluctuate over time as market places and the economy change. Unless you have a real market value strategy for build- ing your business with a sale in mind, your actual sale price may be far below expectations. It is best to create other retirement funds sources beyond your business sale and social security. In June 2015, the Government Accountability Office found that average Americans between the ages of 55 and 64 have about $104,000 in retirement savings. Placed in a lifetime annuity that would yield about $310 per month. The average retired American worker now receives $1,335 per month from social security. At this time social security will only replace approxi- mately 40% of earnings. With only $310 on average from savings income, some future retirees income will be far below financial advisors recommenda- tions of 80% as a minimum. Why am I telling you this? I'm telling your this because HindSite Software's Green Industry Benchmark Study for 2016 reveals 92% of land- scape business owners regard having a happy customer their top priority regardless of whether they make a profit or make their profit margin. The same survey tells us over 80% of companies experienced growth in sales while earnings remained flat. Despite dismal earnings performance only 6% of contractors had a goal to increase profits. Landscape business owners, how will you retire? The only way is to increase your profits beginning now, plan for retirement and execute the steps needed to meet your goal. Envision your retirement goal. Use a free online retire- ment calculator and your social security statement to determine how much you need to save to meet healthy retirement income guidelines of 80% of earned wages at retirement. Hire a pro. Use business consultant like a CPA or specialist in your industry to fine tune your business operation for optimum growth and profit to generate income for retire- ment savings. Know your options. Open a retirement savings account now if you do not have one. There are newer robo advi- sor companies like Betterment and Wealthfront to name just 2, that offer low cost, automated investing you can set up yourself. Stock and bond picking and allocations of each are automated to match your goals. Include any prior savings plans in your calculations as well as any other revenue sources such as real estate to be sold or rented. Make it automatic. Fund your retirement account with automatic withdrawals from your bank account if possible, just like paying any other obligation. Make you #1 in your life. Stash the cash. Record all cash from customers and use it to fund your retirement account because hoarded cash will never grow. You will have to pay social security taxes, but will not pay income taxes until withdrawal years from now. This strategy will increase your social security income later. ■ Harold Fox spent more than 40 years in the landscaping industry and now consults with these businesses to help them be more profitable. ENTREPRENEURS GO INTO business for a number of reasons, and you would be hard pressed to find retirement benefits to be one of them. Yet ask employees about why they chose or stick with a job, and benefits, including retirement, are often listed. Landscape contractor business owner's earnings lag behind that of most other business owner groups, and so does their retire- ment planning and saving. Building Your Niche Practice is sponsored by Intuit QuickBooks. Each month we explore the advantages and intricacies of developing and growing a niche practice. This month we're examining what it takes to serve the niche of landscapers. RESOURCES FOR THE LANDSCAPE ACCOUNTANT • How to Grow your Landscape Client Base www.cpapracticeadvisor. com/12366948 • Solutions to 7 Tough Challenges Landscape Contractors Face http://bit.ly/2jifrqo • NFIB: How to Start a Landscaping Business http://bit.ly/2y0nnQ8 • How to Start a Lawn Care or Landscaping Business http://bit.ly/23ZVvDU SERVING YOUR LANDSCAPING CLIENTS: If you already have or are considering starting a niche in the area of serving landscaping clients, the resources and articles in this issue are right up your alley. Learn how to reach these clients through social channels, learn the basics of starting and running a landscaping business, read about how to value a landscaping business, and catch up on the latest retirement tips for landscapers.