Retirement for small business owners can be quite different than retirement from the corporate world. In either situation, however, it can be a gradual process or an abrupt event and is not necessarily a total severance from work and career activities. It should be thought of as a process and not a single event.
On the surface, a definition of retirement seems simple…..no longer working and having a life of leisure. However, there is much more to it than this. In order to understand retirement, it is necessary to put it in the context of a lifetime of work. It is just one of the career stages. As the baby boomers are reaching retirement age and longevity is increasing, more and more people are facing retirement and fifteen to twenty years or more of post-work life. As a business owner, you have the privilege of deciding when to retire and not necessarily at a certain retirement age. Sometimes it is difficult to know that perfect age or time. A common concern of most people is whether they have enough money to live on for the remainder of their lives, as it is true that a man and his money rarely end at the same time.
A successful business should always have a business plan so that it knows where it is going. In that plan, it is also important to have a plan to leave. With a well thought out plan, you will be more likely to have a smooth transition of yourself out of the business. Making a written plan on how to leave or sell your business years before it will actually happen will likely be more rational and quite different than a spur of the moment decision. This could be even more obvious if you have a partnership. To decide how to divide the business in the case of either person’s choice to leave or death makes the division easier when it happens for the person and also for families to understand what the owner wanted to happen. You could get a little selfish and not think clearly when the time comes to leave a business, but the written map of exactly what was decided years before will make the transition easier, knowing you were thinking more clearly and fairly when it was written than at the moment it is happening.
What are you going to do after you sell your business? Most people have things they want to do but were limited in time while working. It is pretty common to travel and do these things for a couple of years and then decide you miss work. You must think about substitutes for work as a major part of life, the potential loss of work associates and friends, and other changes. Even with secure finances, good health, hobbies, and other rewards for having done well, many retirees may regret that the primary symbol of their usefulness, a business and career, is gone. Along with enjoying leisure, taking on a part-time job, helping others, voluntary activities, and developing an additional hobby are possibilities. Some people decide to purchase another business and many times much different from the one they sold.
As we have stressed in many articles, it is important for a successful business to have a business plan with a map for the future. If you follow your plan, retirement and exit from the business should not be a surprise when the time is right. It will simply be the next step in your life plan.
It is important to remember that age is just a number and that you should not decide to stop working because you have reached a certain age. When you own a business and have worked many years to make it successful, you have the right and ability to sell it and either enjoy working at something else or doing nothing. You have earned that right. Whatever you decide to do, you certainly have much to contribute and are a great asset to our world.
