As we approach the end of another year, many business owners will take stock and focus on their plans for next year. For some this may involve looking towards retirement.
The evidence shows that for owners who have invested a large part of their life and identity into building a successful business, retirement often doesn’t last long. They miss the void left by the work they used to do and life they used to lead – and end up going back into the business, or back to work.
There are a number of reasons for this, but most of the time it comes down to a lack of awareness, preparation and transition planning. Consider the following tips if you are considering your retirement…
1) Know what you are going to do next
If you don’t know what you are going to do next, you’re probably not ready to retire. Often people say they are just going to take some time off, or a long holiday, and work out what they are going to do later. Often these comments come from those who are burnt out and are looking for a quick exit, rather than a planned approach. Most business owners and executives are used to living full lives and thrive on the challenging and rewarding aspects of work. Without projects or interests to focus on they soon get bored.
2) Perfect practice makes perfect
A friend recently told me they were going to retire and take up golf. When I asked if they liked golf or had played before their response was ‘only once or twice, but my friends all play and there is a golf club down the road from my house’. The danger here is that they have chosen a challenge that may not be suitable. If you think something like golf might be for you, you need to build a transition plan that sees you playing more golf (for example) prior to retiring, to work out if it is something you really love and want to do a lot more of. Basically you need to start ‘practicing’ retirement, before you do it.
3) Communicate with your family
Retirement is obviously a big change for the retiree, but it also presents a big change for your loved ones. They know you very well, so map out, test and agree your plans together.
4) Have a transition plan in place
This will probably require bringing in new talent or developing existing human capital to allow you to start edging your way out of the business (and practicing for retirement). This is a detailed process that requires sound planning and communication amongst stakeholders. The extra benefit for owners who are planning a business sale to fund their retirement is the increase in business value that results from reduced owner dependency. It also means that buyers are less likely to ‘lock you in’ to working in your old business…
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