The overlooked truth about building wealth beyond your business.
The Late-Night Reality Check
It’s 11:30 PM. The office lights buzz softly as you sit alone at your desk, staring at the quarterly numbers. The sales look good, the business is growing, and yet, an unsettling thought creeps in: What happens if this doesn’t work out? What if my business isn’t the safety net I thought it was?
Sound familiar? For many small business owners, this isn’t just a fleeting thought—it’s a recurring fear. You’ve invested everything into your business, believing it will fund your retirement. But what if I told you that relying solely on your business is a risky gamble?
Here’s the Truth
Your business is a wealth-building tool, not a retirement plan.
It might feel like a bold statement, but let’s break it down. Businesses fail, markets change, and selling a business for millions isn’t always guaranteed. On the other hand, diversifying your wealth beyond your business can secure your future and give you peace of mind.
In this post, I’ll show you:
- Why depending solely on your business for retirement is risky.
- How others, like Dame Sharon White, have built wealth outside their careers.
- Actionable steps to create your own financial safety net.
Why Your Business Alone Isn’t Enough
- The Numbers Don’t Lie
Nearly 50% of small businesses fail within the first five years. Even successful businesses can struggle with market disruptions, economic downturns, or unforeseen crises. - Valuation Uncertainty
You might dream of selling your business for millions, but what happens if the market isn’t favourable when you’re ready to sell? Many businesses don’t fetch the price their owners expect. - Personal Risks
Life is unpredictable. Health issues, family emergencies, or burnout can force you to step away, leaving your financial future at risk if your business is your only plan.
Dame Sharon White’s Story: Building Wealth Beyond the Day Job
Dame Sharon White, the chairwoman of the John Lewis Partnership, offers a compelling example of diversifying wealth.
Who Is Dame Sharon White?
Sharon White is one of the UK’s most influential business leaders, with an impressive career spanning government roles and corporate leadership. But her financial security doesn’t rest solely on her career achievements.
How Did She Build Wealth Beyond Her Job?
- Investing Early: White prioritized financial literacy and began investing a portion of her income into long-term assets like low-cost index funds.
- Diversifying Income Streams: Beyond her leadership roles, she invested in sustainable initiatives, ensuring her wealth grew outside of her primary work.
- Staying Grounded: She avoided lifestyle inflation, living below her means while steadily growing her wealth.
Her approach underscores a key lesson: building wealth isn’t about earning more—it’s about what you do with what you earn.
What Should You Do?
If you’re a small business owner, here’s a step-by-step guide to creating wealth outside your business:
1. Separate Personal and Business Finances
- Pay yourself a consistent salary, even if it’s modest.
- Keep business and personal accounts separate to avoid financial entanglements.
2. Build an Emergency Fund
- Save 3–6 months’ worth of living expenses in a liquid account. This is your safety net for unexpected events.
3. Start Investing
- Open a retirement account (e.g., SIPP in the UK, IRA/401(k) in the US).
- Begin with low-cost index funds or ETFs to grow your wealth over time.
4. Diversify Your Income Streams
- Consider rental properties, dividend-paying stocks, or side investments that generate passive income.
5. Create a Succession or Exit Strategy
- Work on making your business attractive to buyers by improving profitability and branding.
- Regularly have your business professionally valued to set realistic expectations.
6. Consult a Financial Advisor
- Seek expert advice to create a personalised wealth-building plan that aligns with your goals.
Let’s Make It Personal
Think about this: If your business were to shut down tomorrow, would you be financially secure?
The good news is, you can change your financial future starting today. Whether it’s setting up a savings account, learning about investing, or diversifying your income streams, every step counts.
Your Next Step
Take a moment to reflect on your financial plan. Write down one actionable step you’ll take this week to start building wealth outside your business. Need help? Drop a comment or reach out—I’d love to hear your thoughts and guide you.
Remember: Your business is a powerful tool, but true financial security comes from diversification and smart planning. Don’t wait—your future self will thank you.
