At Millen Capital we’re big admirers of entrepreneurs, business owners & founders.
Most business owners we know have dedicated the vast majority of their adult lives to building their businesses. And owning a small to medium business is tough, we know this because we run one too. Sleepless nights. Early starts. Growing from nothing. Borrowing. Paying it off. Sweating the small stuff. Celebrating the big stuff. Dreaming about reaping the rewards in retirement.
Successful business owners have not only created a comfortable lifestyle for themselves and their families but likely have succeeded in creating jobs, new products, and giving back to their communities, and contributing to the local and national economy.
Of course, the stark reality is that every business owner will exit their business one day, one way or another! In this blog, reflecting on years of client experiences, we ask and answer important personal questions because, in many ways, a business exit is a HUGE life transition.
Life after 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. We find business owners can be particularly reluctant and late retirees– understandable, perhaps, since a person’s business is often an extension of themselves, and giving up such an important part of one’s identity can be traumatic.
You’ve been in charge for as long as you can remember, answering questions, fire-fighting problems as they arise, overcoming setbacks and (hopefully!) celebrating the successes of your business along the way. When you step away, you won’t be doing any of those things anymore and in all likelihood you’ll become far less important to the business.
Devote some serious time to figuring out what you want to do after you leave your business. Planning for this transition can provide you with the time and space you need to envision yourself without your business and plan for the next phase of life.
What are your non-financial goals?
We LOVE financial goals of course and it’s vital to know whether the proceeds of a sale will be enough to sustain the lifestyle you have grown accustomed to (see our earlier blog – Selling Your Business? How Much is Enough?)
But our lives are multi-faceted and it’s crucial to give proper attention to every aspect as we plan for the future. It’s a sad fact that suddenly calling it quits can in some cases cause people to lose their sense of self, placing pressure on relationships and even leading to depression and sickness.
You might want to visualise ‘A typical day of retired life’… what activities will you do every day? How will you spend most of your time? When you look at your vision for each day, does it sound both realistic and fulfilling to you? Make sure you consider:
- Health & wellbeing
What is your plan for physical health & fitness here? Early retired you is still you, so do ask yourself if drastic changes are realistic, but whatever the intensity of your goals definitely make this a priority area. Good health is everything.
On the mental front, will you be pursuing a long-forgotten or new-found passion, engaging in activities or hobbies that expand your thinking and force you to form new neural pathways? Is there a chance you might be a bit bored? What will excite you about getting out of bed every day?
- Family & social
How will you find fulfillment without a job? What will you do to ensure that you see yourself as a worthy person making contributions in the world? Your plan might see you having time to increase volunteering/philanthropic work and/ or developing recreational/creative outlets.
Who will be your primary friends once you retire? Will you be able to see them more often, or will their work schedules prevent them from spending time with you during your new free time? How will you make new friends?
If you have a partner, do the two of you plan to spend most of your time together, or apart? Do you plan to stay put where you are for retirement or move home? Live between homes? Will you be supporting family with childcare or elderly relatives?
NB Making sure you have a solid financial plan to underpin your non-financial goals is a must. Also we (strongly!) advocate involving your partner, if you have one, so you stay on the same page about money and life goals!
- Reverse retiring?
There are many reasons why someone might choose to return to work having previously retired. It can act as a way to keep busy and active and you may enjoy feeling like you are contributing to society again. Of course, someone receiving (and acting upon) good financial advice, should never have to return to work for lack of funds since regular reviews are there to keep plans on track.
Working can provide ‘bonus’ income for a lot of retirees, to supplement their account distributions and pensions. Remember a good financial planner will help you navigate the tax issues that well-intentioned working ‘in retirement’ can sometimes create!
Planning is everything
As with any plan, there will always be unknown variables that will come into play when formulating your vision for life beyond your exit. But don’t let this delay you as the longer you put off planning, the more difficult and paralyzing it becomes.
“Plans are worthless, but planning is everything.” Dwight D. Eisenhower
Meaning the act of planning is incredibly valuable in itself as it helps you to visualise what you want and think through all of the potential variables that could come into play. It will also help you to be agile to make decisions and implement changes when you need to.
Now is the time to seriously prepare yourself for life beyond your business and create your lifetime legacy. This preparation is about crafting the next and hopefully the best stage of your life. It’s about remembering your true passions, determining what is most important to you, and what you want to do when you can spend less or no time with your business.
After all of your hard work, you deserve to achieve your goals for your wealth, your business, and your life. With the proper planning, your next stage can be what you want it to be!
As a business owner, your focus has been on running and growing the company. When selling your business, it’s imperative to take steps to plan for your personal financial & non-financial future.
We’ve also recently published ‘Selling Your Business? written especially for business owners. Download it here
Please get in touch if you’d like our help.