Preparing for Life After the Family Business
by Sherry Herwig, Director, Wisconsin School of Business Family Business Center
February 9, 2018
For a business owner, preparing for retirement is typically focused on financial and business succession planning, while the personal side is often overlooked or deemed less important. Chris Snider, the CEO/President of the Exit Planning Institute, discussed this planning phase recently at a Family Business Center Speaker Series event. He described this as the three legs of the stool - financial, business, and personal. Chris emphasized that if one leg is too short the stool will be unbalanced and not functional.
Unfortunately, there are a lot of wobbly stools out there. Studies indicate that roughly 75 percent of business owners who have exited their businesses are unhappy within one year following the exit1. Sometimes they are unhappy with the details of the transition itself (money, personnel, changes in the business, etc.), but many times it is because they are feeling dissatisfied with how they perceive themselves and how they are spending their time.
Family business owners put so much of their heart and soul into creating, growing, and nurturing a successful business that it becomes a part of their identity. When they finally step away from the family business they often need to reinvent themselves.
Much like the time and effort invested in creating a vision and mission for the business, it is well worth it for owners to devote time to developing a personal vision and mission for the third act of their life - life after the family business.
How to prepare for the personal side of retirement
There are many ways business owners can prepare themselves personally for retirement. Here are two examples.
Create a bucket list
Creating a bucket list is a great way to recognize what you want to achieve professionally, personally, and privately both now and in the future. Categorizing your list by “What do you want to: be, do, have, experience” will help you hone in even further on what is truly important.
Understand your core purpose
Beyond a bucket list, have you clarified your core purpose to the point where you have a roadmap for retirement? Note, that your core purpose can change over your lifetime, so if you have explored this before, it might be worthwhile to revisit it.
I recently participated in a leadership development exercise that helped define my core purpose. The exercise had us think about our:
1) Strengths and talents
2) Values and beliefs
3) Interests and enjoyment
The next step was to find intersections, logical pairings, and connections between the lists. Finally, we were asked to “mine our life story” by looking for examples of experiences or behaviors (beyond the day-to-day activities and family) that demonstrate or exemplify our purpose and why we did it. Amazingly, as we made these connections and reflected on past meaningful experiences, a core purpose began to emerge.
Thinking about retirement years before you plan it can give you time to work on your core purpose and get excited about the possibilities. And if your purpose includes an entrepreneurial venture or starting a dream business, you have time to plan for that as well financially.
When you are looking for resources or guidance to help you with the financial, business or personal retirement planning process, the Wisconsin School of Business Family Business Center is here to help. Contact us and discover how we can help make entering the third act of your life meaningful and fulfilling.
Sherry Herwig is director of the Wisconsin School of Business Family Business Center For information about how to become a member, contact Sherry by email firstname.lastname@example.org or phone 608-441-7347.
1. Whose Business is it Anyways?: Smart Strategies for Ownership Succession by PriceWaterhouseCoopers