Securing Your Future
Every professional groomer should have a sound retirement plan in place long before they consider hanging up their shears.
What about YOUR future? Grooming as a business should include a retirement plan.
A lot of people in the pet industry got here by accident. Sure, there are those who made a conscious decision to work with pets as a career, but many more were probably pushed around by the tides of chance until they landed on the doorstep of a pet business. Of course, they ended up loving it and stayed—who wouldn’t?
I’m one of those accidental entrepreneurs who loves animals and ended up making an avocation into a vocation. I saw an ad for a grooming school at a time when I was dissatisfied with my current job and jumped onto a path that has led me to a career that I still love, even after nearly 35 years.
Working with animals has earned me a living and given me enormous satisfaction on many fronts. What it hasn’t done, however, is magically make me into a forward-thinking person.
Remember the old fable about the ant and the grasshopper? The grasshopper spends the summer singing, while the ant industriously collects food for the winter. Spoiler alert: It doesn’t end well for the grasshopper. I’m the grasshopper personality, following a whim down a career path or wherever it may lead.
It’s a long-held belief in our industry that since many of us followed our hearts to find our niche in the business world, we aren’t the best business people. I think that’s true to some extent, but most of us learned. We went to school, learned from mistakes, learned from others and became savvy business people in our own right. We can become forward thinkers to ensure our futures, too.
If you aren’t already set with a plan for your future, it’s time to begin. No matter what age you are or whether you own a business or are an employee, start creating a plan that will allow you to enjoy your retirement years.
If you own a successful grooming business, you probably have a plan in place detailing what you want to achieve with your business in the next few years. Do you have one for the long term? Do you have a personal one?
Employees in the grooming industry—bathers, stylists, receptionists—do you have a retirement plan? When you finally reach the point where you should have time to play, will you be able to afford it? There’s a meme that’s gone around social media lately, “I keep hearing people talk about what they’re going to do when they retire. I’m gonna have to work right up ‘til lunch on the day of my funeral.”
It’s funny, but it isn’t. If you haven’t planned for your retirement, it may not be as enjoyable as you’d hoped. Not only do you need to plan for what you’d like to do with your golden years, you need to be financially able to stop working at some point. Grooming is a physically demanding job, and although there are plenty of people in their 60s and 70s working in the industry, not everyone will have that kind of longevity. Bad backs and repetitive motion injuries abound and can prevent animal lovers from continuing to work in their later years.
When I asked members of a grooming group on Facebook what they were doing for retirement, a frightening number of groomers of all ages said they hadn’t really thought about it, much less done anything about it yet. I did, however, get some responses from people that seem to really have it together. For example, Laurie Hogan, owner/stylist at Laurie’s Dog Grooming in Ottawa, started putting money away when she was 22 years old. Now that she is close to retirement, she’ll be able to enjoy it, thanks to her prior planning.
Hogan’s home also plays a significant role in her retirement plans. Her business is an in-home salon and she invested heavily in the house, which is located in a high-income area with good earning potential for grooming. However, the taxes and expenses are high, so selling the house and downsizing in a city with lower taxes is part of her retirement plan.
Hogan plans to share her retirement with another party who also has a plan in place, which does factor into her strategy. Working with a financial planner, they decided the best way to save was a registered retirement plan that set aside a percentage of their income every year, which provides certain tax benefits. Understanding such tax ramifications can make or break a financial plan. This is another good reason to employ an expert—a strategy that Hogan suggests every groomer apply to their retirement planning.
“Every person, regardless of age or income level, should have a financial advisor to set goals and figure out how much money they need to retire comfortably,” she says.
Tips From an Expert
Michael J. Callahan, CPA, CFP, MST, a partner at Sachetta & Callahan, LLC, in Lynnfield, Mass., an accounting firm that also handles financial planning and investments, is exactly the type of expert that can help grooming professionals plan for their retirement. His first piece of advice? Start planning as early as possible.
“No matter what age you are, you should be putting money aside for retirement, no matter what else you are doing,” he says. “You can take out loans for buying a house or sending the kids to college, but you can’t get a loan at age 65 for retirement. You have to put retirement first, so you are not scrambling in the last decade.
“It’s never too early to save for retirement. How you invest that money and the rate of return is important, but the time you have it invested is more important than anything else.”
According to Callahan, there are advantages to being a small business owner. “Keep in mind when opening a small business that you have the opportunity to save more for retirement than other businesses,” he says. “There are special retirement plans for small business owners that allow you to put more away than an employee can. Employees can put away $18,000 in a 401k, while [business owners] can put that away and 25 percent of profit.”
However, keep in mind that when you are in business for yourself, there are a lot of taxes involved. Most owners of sole proprietorships underestimate their tax bill, which can lead to scrambling and playing catch-up. Make sure you consult an expert about the impact of taxes so that you are prepared to pay them and move on with other financial planning.
Given all of the intricacies of running a business and planning for retirement, it simply makes sense to hire an expert. If you don’t believe me, think of the last grooming client that came in saying they had “helped” a bit, trimmed around the poodle’s eyes or tried to save money by grooming their pet themselves. We certainly don’t want our financial future to look like that dog.
Far too often, the objection to hiring an expert will be, “I don’t have enough money to have a financial planner.” But according to Callahan, some financial planners work hourly. Regardless of how much money you have, they can still come up with a financial plan tailored for your needs.
Of course, there are still firms that deal by the size of the portfolio, but you can find one that doesn’t. Go to the Certified Financial Planner Board to find the right fit for your situation. It’s a certification earned by means not unlike what we need to do to become certified by IPG, NDGAA, or ISCC. Other options include going to Financial Planning Association, which has an excellent search function, or asking your tax accountant if they know a good financial planner.
Hiring a professional isn’t a guarantee that you will have plenty of money to enjoy your retirement, but their guidance usually ends up paying for itself. A professional can enhance how much money you have to work with in the long term and make sure that every possible scenario is considered. What will happen if your spouse dies in an accident? Will you have enough money if you live until you are 90 years old? A professional can help you plan for every eventuality.
Anyone Can Plan for Retirement
Even if you decide not to consult with a financial planner, every grooming professional can and should invest in their future. Callahan says it can be as simple as opening a Roth IRA into which you put a couple hundred dollars a month.
Mary Oquendo, owner of Pawsitively Pretty Mobile Grooming in Danbury, Conn., as well as Pawsitive Educational Training and Hands and Paws Reiki for All, has been working toward retirement goals since she was 20 years old and says that keeping her ultimate goal in mind has been a critical part of it. “The easiest way to get to a particular point is to start at the end and work your way back,” she says. “You can only get so far when moving forward if you don’t have a clear path to the end.”
Of course, that doesn’t preclude course corrections; it only means you should know where you want to be at the end. Just as a business plan will morph to accommodate changing circumstances, a good retirement plan will too. The important thing is to have one.
For example, Oquendo researched the best areas to live for retired persons. That led her to plan a move from Connecticut to western Washington. Not only does that state offer enticements like a more temperate climate, it doesn’t tax pensions.
Oquendo’s multiple income streams are another part of her retirement plan. Pawsitive Educational Training is something she’ll be able to continue working on when she is no longer grooming full time, as is Hands and Paws Reiki for All.
“You can’t wing your retirement years,” she says. “The earlier you start planning, the better off you will be.”
That doesn’t mean that if you didn’t start early, all is lost. No matter your age, if you haven’t begun planning yet, right now is the time to start—especially when it comes to saving. No matter whether it is building a business big enough to provide for you when you sell it or let someone else manage it, changing careers to fit with retirement or another strategy, don’t wait to set it in motion.
Whatever your dreams and plans for retirement, start putting concrete steps in motion today to ensure that you can carry them out.
Carol Visser has been involved in the pet industry since 1982 in various capacities, including grooming in and owning a busy suburban shop, working as a product expert for PetEdge, teaching seminars and training dogs. She certified as a Master Groomer with NDGAA in 1990 and as a Certified Pet Dog Trainer in 2007, and she continues to enjoy learning about dogs and grooming at her small salon in rural Maine.