You’ve spent years building a business-through lean and flush times. You may have never really envisioned retiring and leaving the business behind-or it seemed just a far off fantasy. Now that retirement is looming, or at least you’re starting to picture a life that looks more like retirement than working every day, you may be trying to figure out what’s going to happen to the business you’ve built when you retire. Here are some basic issues to start thinking about in deciding what your options are for your business if and when you retire…
You may have intended for your business to be a “family” business. If you already have family members who are working with you and preparing for the day when they will take over the business, then you are a few steps ahead. It is important to have very candid conversations and evaluate what needs to be done in order to make sure that the business is transferable and the new owners are ready to assume responsibility. If the business has existed as a sole proprietorship, you’ll need to do the necessary legal work to make sure it can be run by new owners. Sit down with a legal advisor and your financial advisor to draw up a plan for how to transfer the business (and when to transfer the business) to family members.
If there are no family members set to take over the business, but you’d still like it to continue on after your retirement, you have several options-you can continue to own the business and hire management to operate the business for you; you can sell the business outright to new owners upon your retirement; or you can choose and mentor other non-family individuals to take over the business. Some business owners also consider transferring ownership of the company to a “cooperative” of the workers. All of these situations and circumstances will take some legal and financial advice to make sure everything is done legally and completely. Depending on the type of business you have been operating-things could be relatively easy to transfer or pass on, or it could get complicated. Get plenty of trusted and reliable help in making sure things are done properly. It is also recommended to use software for small businesses to ease your operation and management.
In addition to the practical logistics of leaving a business you have built, there can be emotional and psychological issues to process as you contemplate retirement too. You will have to decide how much of a role you wish to have in your business and how you will adjust to the changes-will you go “cold turkey” into retirement or will it be a gradual process? The most successful retirees make sure they have activities and alternatives in place before they leave the working world. This way they don’t find a sudden, huge void that they have no idea how to fill. There are many classes and support groups springing up to help seniors adjust to retirement, you may want to find one (or organize one) with other business owners and entrepreneurs so you can support each other with issues that may be specific to letting go of the consuming life of running a business. Continuing your membership in any professional or community groups may be important, and you may even want to consider being a mentor to other individuals who are just starting their small businesses.
You may even want to see a counselor or a life coach (many people now specialize in helping individuals manage life’s transitions and changes) to help you with the process of letting a business go and moving into retirement.