Business Owners - Are you ready to hand your baby over?
Posted on January 18, 2010 by Ann-Marie Docherty, One of Thousands of Executive Coaches on Noomii.
If retirement is the next part of your plan then I wish you all the best. I just hope you are well prepared!
Having left the corporate world to set up my own business in recent months, I take my hat off to all of you business owners who have been working tirelessly for years to make a dollar.
People engaged in the large corporate world of business often would have no idea of how much drive, energy and expertise it takes to survive in your world. Anyone who has ‘put in’ years of hard graft in running their own business gets my respect big time. I only hope I have the stamina and energy to last as long as a lot of you guys have!
So why would I be looking at retirement then if I am only starting out? Well I have recently semi retired, unexpectedly from my Corporate Executive role as a result of a health scare. It made me realise, firstly that life is too short not to be following your dreams and two, if I never worked again I would a) go bananas and b) my little nest egg would probably not last for an extra 10 years beyond my original calculations. So what’s a girl to do?
After many hours, and I mean many, of trawling the internet for tips on retirement there were two key aspects which seemed to scream out at me. The first was the importance of planning well in advance for the wondrous moment of retiring. I thought I did that but hadn’t done it too well. I obviously was too optimistic and overlooked the need to build anything into my plan for the ‘unexpected’. This is despite the fact I had Loss of Income insurance. In my experience half a trauma didn’t quite fit the definition for full coverage. Secondly, the importance of a having a succession plan for your business.
Now I know there are some of you who will already be well down the road with your grand plan and feel very comfortable that your future is just waiting to pan out at the right time. Congratulations if you fit that bill. If, on the other hand, you’re like me, and either didn’t get it quite right first time, or leave most things till the last minute then it might be time to re-think.
I’m sure that at some time most of us once we reach the age of 40-45 have given retirement some thought. At least in a fleeting moment when you found a bit of time to star gaze. Alternatively maybe you put a lot of faith in the ‘things will fall into place’ concept. Unfortunately, I hate to be the bearer of bad news – it might not fall in the direction you are thinking!
Unless your investments pay great returns or you are left a major inheritance from your wonderful rellies, or you have a jackpot win on lotto or the pokies, we run the risk of not having enough return to enjoy the rewards to do all the things that we intend to when that time comes. If you fit the latter category and your retirement is looming. Get your skates on and start the plan. You know what they say, better late than never.
Oh by the way, in case you are unfamiliar with the term ‘succession plan’ that’s what they call it when you decide who you are going to leave your business too.
You can groom someone up from within the business, decide to hand it over to someone else in the family, or seek an external buyer. Either way, the succession plan will have two main factors for example in Australia these are: the Transfer of Power, and the Transfer of Assets. These terms will vary depending on which country you find yourself in so it is essential that you engage someone who understands the legal impact of decisions on your business. Whatever you decide, if you want your business to continue after you have gone or if you want to maximise the ongoing value of your business to obtain a great sale price then you need to plan for that too.
Yep you’ve guessed it. Like it or not there is no way of getting away from the fact that if you want to reap the rewards of all your years of hard work, you’re going to having to sit down at some point before your retire and put together a plan of action.
But fear not. There are people out there who actually enjoy this task and for a piece of your pie they will help you draw up your plan of action from here. To get you started I have put together a check list of Things to Do for your consideration before you retire:
•Start to think ahead now – Get Started!
•Set up a Retirement file.
•Prepare your own vision for what your retirement dream will look like.
•Decide on an actual or approximate date;
•Remember to include others who your decision might impact;
•Write an ‘exit’ plan both in the event of retirement and also just in case your retirement is even earlier than you think through ill health or premature death;
•Try to estimate how much money you need to live your desired lifestyle;
•Find out what your Centrelink entitlements will be;
•Write down any major expense which will be necessary i.e. new car, move house etc;
•Make sure your will and estate planning is up to date;
•Write down what you plan to do in your retirement;
•Include the cost of any hobbies and ongoing costs;
•Consider whether you will work part time;
•Consider what it will take financially to maintain good health;
•Give some thought to the emotional and psychological aspects of the next part of your future;
•Review your plan annually;
Finally the most important part, don’t fly solo on this one seek the advice from the experts it will pay off in the long run. Ann-Marie Docherty
Australasian Executive Coaching