Thinking ahead to your business’s future without you is one of the most important things a small business owner can do to get and keep their business in shape.
And it really doesn’t matter if you’re not ready to retire.
Because safeguarding your investment in your business, its value as well as its ability to continue generating revenue for you and your family is critical, whether you choose to retire, or circumstances force transition upon you.
Whatever your age, it’s really never too early for you to ask:
- Can my business survive without me running it every day?
- Could I take a week off, starting tomorrow, without my business taking a hit?
- What about longer periods of time, like taking a month’s vacation, or even several months away?
If your answer is essentially ‘no,’ that you can’t take time off, that no one would have any idea what to do without you or your business would suffer, then you know you’ve got work to do!
In which case you ask yourself:
What do I need to do or set up so my business COULD survive without me running it every day?
Begin Your Transition Plan
Answering that question allows you to begin developing a transition plan to expand others’ skill sets so you can delegate some of your day-to-day responsibilities to them.
Think of this as a first step toward being able to retire.
Taking steps to strengthen your business’s ability to run without you, lets you work less and enjoy other aspects of your life as you age.
With a little more free time, you can even ‘test drive’ what retirement might be like for you. Travel while your health is good, enjoy time with your family, start hobbies or even new business ventures on the side. All while ensuring that your primary business income remains stable and its future assured.
That way when you do choose to retire, you will have a strong source of continued income to fund your retirement, or a stronger business to sell.
Don’t think about this as finding a successor. That’s a whole different process of handing your business over to someone else when you’re actually ready to do that.
Think Things Through By Succession Planning
What I recommend is ‘succession planning’, which is about creating a transition plan for how to handle things at whatever future time your business needs a different leader, or new owner. It’s a thinking process that doesn’t require immediate action, so don’t let the term scare you. However the planning process prepares you (or your family) for the day it does.
Your actual ‘retirement’ is the final step of a succession plan which, depending on your age, health, finances and other considerations, may be many years off.
Plan Your Exit
Most business owners don’t face the reality that they will indeed need to step down or retire someday – whether by choice, necessity or sadly, death.
Yes, it’s true. There’s no escaping this fact.
You will leave your business someday.
Nevertheless, nearly 60 percent of small-business owners have no succession plan in place to protect them.
A business that is not prepared for the loss of its leader often has no option but to be sold or closed, with all your years invested lost – and the financial security it could have provided you, your family, loyal employees and your community, lost, too.
I always encourage midlife entrepreneurs – any business owner age 50 or over – not to wait until they want or need to retire to begin planning for their departure.
Preserve your options.
Start early. Start NOW.