Recent data suggests that baby boomer business owners are not ready for retirement. An article published by Blog Wallet on August 5, 2015, Survey Finds Small Business Owners Not Ready for Retirement, cites a TD Bank survey that year.
A telling quote from the article revealed the following:
“In terms of plans for retirement, nearly half (47 percent) (emphasis added) of business owners said they do not yet have a plan in place, while approximately one-quarter indicated they would close the business. Furthermore, 27 percent of business owners who started the company from scratch said they plan to close their business when they retire, compared with only 8 percent of those who took over an existing business. Fifteen percent of business owners overall said they would transfer ownership of the business to family or co-workers.”
While the article does not prescribe solutions, it does illustrate some of the reasons why baby boomer business owners may not want to retire. These include, but are not limited to the following:
- The lack of financial resources to afford retirement,
- The lack of a personal transition plan in retirement,
- The lack of social connections after they leave the business,
- Questions on how to ensure the business’ legacy continues, and
- The presence of an individual to replace the owner in his role.
Who Can Replace Me?
When the owner has started the business, developed the marketing, sales, and branding necessary to create revenue, learned how to manage its finances, hired and managed employees, and adjusted to changes in the market; it is common for an owner to think that he is irreplaceable. Oftentimes this conclusion leads to an owner becoming stuck in a dilemma – “should I stay or should I go.”
I mentioned that quote recently in another article, (and correctly attributed The Clash as the authors of a song by the same name). Even though I’m not a Punk Rocker, I thought long enough about the lyrics of the song to see how it can apply to baby boomer owners who are stuck, because they may not be sure which direction to take.
Stay And Grow
For owners stuck in this dilemma I have a suggestion. Stay and Grow. Commit to stay with your business, develop a solution that involves hiring your replacement, and commit with that new CEO to grow your business; so, that when you are ready, you can start to reduce your full-time commitment to the business while beginning to carve out a personal transition plan that enables you:
to fund a financial retirement plan,
develop recreational, creative, and intellectual pursuits that match your interests,
investigate places you can live, and
get involved in volunteer or philanthropic pursuits, to name a few.
You Are An Irreplaceable Intangible Asset
I agree you are irreplaceable. As the central intangible asset in your company, you provide significant value to your company’s valuation, past and present; but what about the future? While it may not now be known when your intangible asset value begins to decline, you can preserve that value, and perhaps increase it, by taking steps to improve not only your own intangible asset value, but also the intangible asset value of the company.
I believe that hiring a CEO through an executive search, can work with you to grow the intangible asset value of your company, and it is a realistic option for you to consider. So, if you are inclined to stay and grow, let the process begin!