My old friend Andrew Sherman wrote this terrific piece about how baby boomer business owners are not prepared in regards to what happens to their companies when they want to retire. This is a serious problem for a ton of small businesses — as well as their employees, vendors, etc. — which are going to be hit with a generational reality they hadn’t considered and thus have no succession plan.
So why are so many of these boomer small business owners in denial or simply refusing to engage in transition planning? For some the reasons may be financial in nature. They simply are unprepared for retirement and are fearful, many for good reason, that the sale of their company will not fetch enough proceeds to fund their retirement plans and needs. For others the answers may be more emotional than financial. They have some or all of the money they need to live comfortably in retirement but have no clue what they would do all day if their business were sold. Their sense of self-worth, ego and respect all are inextricably tied to the operation of the business.
Imagine starting a business in 1975, building it and running it for 45 years and being everyone’s boss, matriarch, respected community leader, philanthropist, etc., and in 2020, you sell the business and now consider yourself a “nobody” and a “lazy sloth.” Yes, some dream of playing golf and enjoying early happy hours, but most simply have no idea what they would do all day and are in denial as to their vulnerability.
In the piece, Andrew — an expert on business and franchise law — offers some points that those boomer business owners should get to work on as soon as possible. Read the whole article here.