“No business task seems more difficult than slowly disengaging from the thing that gives you your identity, the clients you love, the routine you've established, and the team you've been integral to for many years.” This quote from an article in Journal of Accountancy “Retirement: Avoid the pitfalls and plan for the possibilities” is so true and something that we come across frequently with the business owners we work with. Just as we discussed in When It’s Time to Step Away from Your Business, getting used to the idea of letting go or stepping away from your business may be the hardest thing for an owner to do.
It takes a good amount of time for owners to separate their identity from their businesses, and they need to plan for the best way to extricate themselves and plan for the next phase of life. A business transition truly is a process and not an event from all perspectives – personal, financial, and business. And planning for this transition can provide owners the time and space they need to envision themselves without their businesses. “The retirement process is a truly humbling and sometimes painful experience that most of us do not understand or appreciate,” writes the author of the Journal of Accountancy and she provides some helpful tips for avoiding the numerous pitfalls that owners can face as they’re transitioning:
Don't wait until the last minute to tell firm leaders or begin a transition – Make sure you provide adequate time for the transition, including partners, successors, employees, and clients. It will take time to delegate responsibilities, develop new client arrangements, and plan for succession.
Don't hang on too long – Those who will be continuing on with company will need to figure out how to operate and thrive without you. Give key managers and owners the opportunity to step up and take on new responsibilities.
Don't communicate that you're retiring when you're simply transitioning your duties – The author points out that if you’re not leaving completely but just beginning the process of selling and/or cutting back on responsibilities, make that clear to others in the company.
Transition completely, even if you're going to continue working after you officially retire – If you’re going to continue working, the article suggests that you develop a new role with new responsibilities, transitioning your previous role to successors.
Don't be selfish – While you’ve earned a certain level of clout and respect, don’t let it become an entitlement attitude. The author suggests putting your own interests aside and doing what's best for the company as a whole.
As we’ve discussed previously, business transitions can be emotional events, even for the toughest and most seasoned businesspeople. Preparation ensures that you have a life beyond the company and improves your chances for a positive outcome. The author of the article suggests a 6-step strategy for creating a life after work:
- Begin a list of all of the things you might do after retirement.
- When you think of something that might be interesting to do or would be good to tackle if you had time, add it to your possibilities.
- Share your possibilities with others, especially family members.
- Try out some of the possibilities on your list.
- Keep the list "full."
- Don’t leave it behind! Keep the list with you to remind you of all of your potential options.
Proper preparation for your business transition and retirement ensures that you have a life beyond the company and will improve your chances for a positive outcome.
Preparing yourself for transition is the first and most important step. While it may be difficult to see at the time, you are more than just your business and you should consider each of the multiple facets of your life as you architect your transition plan. Remember, business transitions are emotional events, even for those who are not usually emotional. Preparation ensures that you have a life beyond the company and improves your chances for a positive outcome.