Terrified...

That’s not the word that comes to mind for most people when describing a future without the responsibilities of running a business. It’s not the word that comes up when imagining a life with the time to do whatever you want to do, and sufficient financial reserves to fund a range of options. So why is that the word I hear most often?

Often, business owners confide in me about their plans for succession and how they are thinking about a full, or some sort of partial exit. Whether they are 55 or 75 years old, the most common emotion they express to me is fear. Despite a successful, financially rewarding career as an owner, this is a major life change, and they have fear.  In some cases it’s a subtle gnawing fear – more of an uncertainty about getting started or a discomfort thinking  about ‘what’s next’, making it easy to go on with business as usual. In other cases it’s a constant stressor as worries about finding that right buyer/successor, , concerns about fully funding their lifestyle in retirement, waning energy levels, or what to do with endless hours of free time permeate sleepless nights or creep in during the busyness of the day. 

Our perceptions, their reality

I know what you’re thinking…You’re thinking ‘That’s crazy! Those worries are unfounded. They are successful business owners! Hard charging, financially savvy, with a backlog of activities they never had the time to do! This will simply be the next stage of a wonderful, earned, and well-deserved life!’

Sadly, that’s rarely what I hear. The fear they face is often due to one of the following:

1.       Stress from the reality of letting go of their business. This includes the stresses of finding a trusted, qualified buyer, negotiating through the sale or transfer of their business, and the uncertainty of whether their financial return will meet expectations…or worse, their base financial requirements.

2.       Losing their identity, and in some cases – their perceived status, built over a lifetime of growing and leading a successful business. Who am I if I am not the owner of…?

3.       Uncertainty about ‘what’s next?’.  In our achievement-oriented culture, retirement/semi-retirement is treated as an exciting, coveted time! But many owners fear endless days of nothing -- boredom. And worse, they believe that if they broach the subject of their uncertainty with friends or family, they will be ridiculed or summarily dismissed. And they just might be!

The reality is that every owner will leave his or her business one day. Whether they leave to go TO something they have been waiting to do all of their life, find themselves ousted from the business as a new owner takes over, or they experience health or family issues…. They will exit.

The opportunity

To do it well, we need to address the fear. How? First, we need to talk about it! We need to reduce the stigma associated with the stress and uncertainty that comes with a life change of this magnitude. A change this big will often come with a wide range of emotions. Holding them inside serves no one. We need to be able to talk about them, express them, seek out others who are facing them as well. Let’s de-stigmatize the fear! 

We also need to take action. We need to come together to create an environment where it’s acceptable, even encouraged, to acknowledge the stressors, and then we need to build systems and structures to navigate the transition from business ownership to what’s next. We need to support each other as we figure out how to let go of the responsibilities and identities that served us so well in the past and craft new ones, creating a different and exciting future.

Cultural Shifts

Some of the most significant shifts in our cultural and social norms have come from the combination of changing demographics, a collective recognition that change is necessary, and the innovation and creation of a whole new set of systems and structures to facilitate that change.  It’s time to create a shift. With baby boomers turning 68 this year, six to 8 Million businesses will be changing hands in the next nine years. We need to address the stress and uncertainty head on. This is not just a nice to do. It’s imperative.

What are you willing to acknowledge…even if only to yourself?

Abby Was Quoted In Kiplinger’s Personal Finance Magazine

Get In on a Stellar Second Act by Janet Bodnar

I retired as editor of Kiplinger’s, I was asked to continue writing my Money Smart Women column and to launch this new column on retirement living. One year later, I’m happy doing both. But I sometimes wonder if I should be doing something completely different from my previous profession—say, learning how to tap dance (which I’ve actually looked into). 

I put that question to Abby Donnelly, founder of The Leadership & Legacy Group, who counsels retiring executives on how to transition to their next phase of life. Donnelly responded by asking me a question: “Do you still feel you’re connecting with readers and helping them make good financial decisions?” Definitely, I replied. Then don’t worry, she said. “You’ve retired to something you find meaningful and rewarding.”

Donnelly draws a distinction between interests—in my case, tap dancing—and activities that deliver purpose and meaning, the holy grail of a fulfilling retirement. And there’s no one route to that goal. “Some people just want to do what they did before, but less of it and with more control, while others want to try something they never knew existed,” says Marci Alboher, author of The Encore Career Handbook. Alboher is also vice president of Encore.org, which sponsors fellowships that encourage baby boomers to use their skills to help their communities (see an interview with her in the February Ahead).

Three Steps to An Endless Summer

Summer is coming and that usually drums up memories of long relaxing getaways to the beach or mountains, time with family and friends, and freedom from the demands of a business…even if for just a few days. If that is starting to sound more and more appealing, it might be time to take a serious look at bringing on a motivated successor. This does not mean your exit is imminent, it simply allows you some additional flexibility to evaluate who you might invite to assume more management and leadership responsibilities, and when you might be ready to reduce your level of responsibility in the business and create your endless summer. Ultimately, it gives you the opportunity to evaluate your timeline and confidence in an exit strategy.

First - Who?

The usual suspects include family members, key employees or third party buyers.  But your business isn’t ‘usual’. For your business, you need to consider what matters most to you. If you want the business to provide for your family, you have to realistically consider whether the family member(s) has the skills and experience to run the business profitably and sustainably. Are they motivated enough? Can you afford the options on a ‘sale’ to the family member and still fund a retirement lifestyle that meets your personal needs?

If you want the business to benefit your key employee(s), you have to realistically consider whether they have the skills, experience and motivation to run it? You also have to figure out what a ‘sale’ to them will look like and whether you can afford to do it.

Financing your Endless Summer

Most transactions occurring between owners and family or key employees will be financed, in part or whole, by the owner. And, these are the most complex and challenging transactions to work through. Why? Selling your ‘baby’ to family or loyal employees is so emotional. Your deep connection to them is what makes the sale so gratifying and yet for the transition to work for all, it requires you to let go and accept a different leadership model. It’s easier to do that with someone you are not emotionally connected to. Are you prepared to release the reins over time, while financing their strategic direction?

Building Value: Your Endless Summer

If a third party buyer is the best option for you, you need to build your strategy now. This is the most time consuming of the three options because you have to find them, negotiate and then sell. Starting now allows you to test interest, seek prospective buyers, and get feedback on the value of your business to a third party. We know it’s valuable to you, but what will someone else pay for it? With that information, you can choose to invest another 2 – 5 years or even 5 – 10 years, to make the timing and valuation work for you.

Is it time for Your Endless Summer?

You’ve invested in your business. Now invest in your life. It’s your time.