It depends on what study you read or who you listen to, but there is a fact facing many business owners:
- There are 76 million people born between 1946 through 1964, commonly referred to as the baby boomers,
- By many estimates, 9.2 million business owners are over 50 years old, and
- An estimated 8 million business owners will leave their companies in the next ten years.
Sounds like baby boomer transition planning could be important.
If you’re part of this age-and-business- owner cohort, you have some decisions facing you:
- Financial savings,
- Sale of the business, and
- Your career in retirement.
None of these decisions are that straightforward.
As you start to think about your future decisions, it’s clear that you may not have prepared a plan to transition from ownership into a partial or full retirement.
Let me ask you, do you need a plan in order to transition from your business? Several questions that I typically ask business owners (with typical responses):
- “What’s your exit strategy?” “I’m sitting in it.”
- “How much do you have set aside for retirement?” “Enough, I guess.”
- “How much is your business worth and when do you plan to sell?” “I am not sure, and who said I want to sell?”
- “How much do you want for your business – if you decide to sell?” “Enough to fund my retirement!”
I recognize this may or may not be familiar so let’s consider a few more questions:
- What inhibits you from retiring?
- And what if it is your spouse or significant other who is retiring?
- Are you the kind of owner that has been successful in business without a plan?
- If you are, then what is the attraction in developing a transition plan?
- What would you like to do in retirement?
- Are your advisors encouraging you to develop a transition plan?
- Are you afraid of seller’s remorse?
Do You Need A Transition Plan?
Much to the chagrin of advisors everywhere, you may not want a transition plan or an exit plan. Much to the chagrin of those ever-hopeful Generation X and Millennials who aspire to own your business; you also may not believe that they are prepared to take over the complexities of a business like yours.
“I don’t know if there is anyone who would be able to run this business like I have, it is so complex.”
Do You Need Baby Boomer Transition Planning?
So, do you really need to engage in transition planning? Are you open to a discussion?
Success = Understanding What’s Next
Success can be supported by a plan, but a plan is only a tool. Success is most influenced by understanding what’s next. You need to understand the questions (and answers) involved in making a personal transition to life after owning your business as well as making a successful business transaction to new ownership.
Understand The Change In Role
Consider the change in role that you will make: full-time employment to partial or full retirement. This change in role does require you to modify your expectations. But if we know what contributed to your business success, chances are we can also understand how to use that knowledge to help you create a successful transition.
And let’s not underestimate the significance of this role modification – a life of work for 40 (more or less) years to a life filled with uncertainty? After all, what careers in retirement will suit you best?
Use A Thoughtful, Step By Step Process
Anytime I work with owners in a transition process it’s important to help:
- Clear up vague ideas about the transition and accurately quantify the investment involved,
- Objectively understand the decisions you need to make,
- Understand your motivations for the transition,
- Put safeguards in place to ensure a successful transition process,
- Be clear how your emotions can impact the transition process, and
- Ensure you can hold your advisors accountable to the transition strategy – successfully.
Make Your Transition Rock!
Your business transition can be an exciting process where you can become more self-aware of your motivators toward leaving, you can establish your transition goals with a trusted advisor, you can prepare yourself emotionally for the transition, and you can appreciate the benefit of a transition plan both for the successful sale of your business and for your successful transition into your next career – whatever it is you choose.
What are your talents, your skills, your reasons and your way? Where do you want to go? How do you want to get there? What is your belief that you can get there? What’s next – for you?
On life’s wonderful journey through your personal and professional roles would it help a bit if you could learn how to become more confident as you approach your transition knowing full well that you are truly in control?
If you started in business so you could live your dream job, doesn’t it make sense for you to start in retirement with you living your dream retirement? Helping business owners to make effective transition strategies is something we enjoy doing. You can too.