Running on adrenaline, motivated by challenges and highly focused on growth, entrepreneurs are often resistant to the idea of retiring. Handing their business over to someone else isn’t something they’d ever really consider. In fact, it can be hard to talk about.
And yet ... As with all adventures, there comes a day when your entrepreneurship journey will come to an end. Preparing for this transition—which doesn’t necessarily mean the business has to end—can be the most important part of your journey.
What if we stopped calling it retirement?
The word retirement is often associated with the idea of slowing down. It can feel forced or come with a loss of meaning and direction. It’s essentially the opposite of what drives a person with an entrepreneurial spirit.
“Business owners are cut from a different cloth,” explains Richard Quinn, a business transfer manager with Desjardins. “They’re risk takers and they run on adrenaline. The idea of doing anything other than working on their business can feel like giving up. It’s not in their nature.”
But leaving a business doesn’t mean life is over. For many people, closing the window to entrepreneurship opens the door to reinvention. A chapter filled with new projects, mentoring, social involvement, investing and rediscovering old hobbies you didn’t have time to pursue before.
Protect what you've built
If you love your business, you’ll want to do what you can to preserve its legacy—especially once you’re no longer around to handle day-to-day operations. If you spent years building your business, the last thing you want is for it to fizzle out after you leave.
Angela Iermieri, Financial Planner at Desjardins, believes this wholeheartedly. “Entrepreneurs play a key role in business operations. If something goes wrong tomorrow morning, the business needs to be able to keep running,” Richard Quinn says.
Longevity isn’t an exact science, but it’s something that can be worked on. “The business owner needs to ask themself if the company is ready to be transferred on an operational level as much as on a human level. Is the team stable? Is the business profitable? Is your market well defined? Do you have a business plan? Who will take over the business, and in what capacity?”
Preparing for this transition can trigger a grieving process. It can be demanding and uncomfortable, but it’s crucial for ensuring business continuity and protecting the value of everything you’re leaving behind.
Protect your assets
Entrepreneurship can be a lifestyle, but many business owners also think of their company as an asset that will fund their retirement. “That’s not always the best plan,” Angela Iermieri says. “Business owners don’t always assess the value of their business correctly, especially if they’re emotionally involved. The market value of the business at the time of sale can also fluctuate depending on the current economic environment, market conditions or even personal events in the business owner’s life.”
Even just coming to terms with the idea that your business will be sold one day requires you to assess its value as an asset. Will it be enough for a comfortable retirement? Will you have the resources to start new projects and take care of your loved ones?
If the answer is no, you’ll need to diversify your assets. The earlier you start pondering these questions, the more likely it is that you’ll be able to reverse course.
You can also plan to leave the company gradually. For example, you could stay on as a consultant or take on an advisory role. Transitioning away from your business also gives your children and other people you know a chance to manifest their interest in taking over the business if it’s ever crossed their mind.
A new chapter
Life after business ownership is the start of a new journey. Think of it as an opportunity to go after other dreams! After all, there are 168 hours in a week.
If you’re not sure how to use them, talk to other business owners about how they spend their time. What did they do when they first left their business? Hearing about their experiences may help you get inspired.
If you’re worried about losing your sense of purpose, consider sharing your knowledge with young entrepreneurs who might benefit from your expertise. You could even start a brand new business in a different field!
Life after entrepreneurship requires its fair share of planning. From protecting your legacy to making sure you have enough money to fund your future and care for your loved ones to pursuing new goals ... are you ready to start thinking about it?