How your sloppy, selfish attitude wreaks havoc
Do you know a business owner who claims that they are never going to retire? Yeah, me too.
They love what they do too much. They are still having fun working in their business. It keeps them engaged, energized, and intellectually on their toes. These are the ones who plan to “die in the chair” because they truly cannot envision a world in which they are not a part of the business. I get it. Retirement, as a concept, is a bit elusive to me too. I don’t see myself ever content to sit on the couch, watch soaps, and eat bonbons.
The “die in the chair” approach to retirement appeals to many business owners for other reasons too. Because they’re going to keep going forever, this philosophy enables them to avoid, ignore, or patently refuse to do any succession planning or preparation. They don’t need to; they’re never going to leave. And when they do, it’s not their problem anymore.
In the past, when I worked or consulted with this type of cat, this attitude made me mad. Like spitting fire, hopping mad. It’s selfish and sloppy. It lacks compassion and awareness. Regardless of whether there’s a business in the estate or not, the reality is that this potentially leaves behind a major, messy cluster for the family and others to sort through — and it does happen.
Early July turns out to be a rather rough time in my neighborhood. Last year, a neighbor just two doors down passed away unexpectedly. This year, another neighbor, two doors over in a different direction, passed away unexpectedly. Both men were 64 years old, seemingly in relatively good health. They were snatched away by broken hearts (medically, not romantically speaking). They went to bed and never woke up.
Both men were good men, known well for their professions and accomplishments. They were vibrant, active, and had gas in the tank to pursue their interests. While one had just retired and was enthusiastically preparing for his next adventure, the other was running a long-standing business in the community.
Hopefully, both of these guys were proactive and had basic estate planning documents and tools in place, but my hunch is that they didn’t. According to a 2021 Survey by Caring.com, Americans are kicking basic estate planning down the road. Only 44% of respondents over age 55 reported having estate documents. It goes on to report that despite the in-your-face wake-up call of a pandemic, only 33% of adults overall have a will or trust in place.
Imagine that scenario with a business operation involved. According to the 2018 Wisconsin Exit Planning Institute (EPI) State of Owner Readiness Survey I spearheaded as the chapter president of the EPI Wisconsin, few business owners have given transition any meaningful thought or effort. We found that, “Despite 93% of the business owners affirming that ‘transition strategy is important’”:
- 80% had no written company transition plan and 43% had done “no planning at all”;
- 92% had no written personal plan for what they would do after transitioning their business and 19% had not even thought about it;
- 83% had not established a formal transition team;
- 45% had not sought any outside advice; and
- 74% had not accomplished any formal transition education.
And yet, according to EPI, there is a one in two chance that a business owner will be forced out of their business due to unforeseen circumstances. That is, there is a 50% chance that, if you own a company, you will be forced to leave it and your ownership because of death, disability, divorce, dispute, or distress. When that happens, the circus comes to town, takes your money, and nobody cleans up after the animals.
Those odds are humbling and should be motivating. And yet …
As I said, business owners with a “die in the chair” attitude used to royally honk me off. They don’t anymore. I’m completely at peace with the owner who wants to continue to work until they simply are no longer able to, with one important caveat: They have taken the steps needed to ensure that plans are worked up and in place to navigate the circus acts and aftermath. When you take these statistics to heart and have a well-considered transition plan in place, you’re installing the safety net under your family members and colleagues flying on the post-crisis trapeze and have the pooper-scoopers waiting in the wings.
The safety net is not complicated. It’s common sense, in fact. It means you’ve set up the business so:
- Knowledge is shared. Everything has been pulled out of your head and conveyed to others, so they know what, when, how, and why to do things in your absence.
- Your company relationships with customers, suppliers, and employees are collaborative and well established with other members of your team.
- You have a management team that is high-functioning and can make decisions without sending you into high anxiety or, just as bad, delegating decision making back to you.
- Systems and processes are documented. People are cross trained on what you do and can step in while you’re not there.
- The family knows who your key advisors are, how to contact them, and what contingency plans you have put in place.
- Your advisors know your wishes, your team members, and each other so they can work together to help colleagues and family members transition to the new reality.
- Your corporate and personal estate documents are aligned, and your wishes have been communicated to those surviving you.
If thinking about leaving your company for good like this is too creepy or dark for you, flip your mindset. What would you put in place if your beloved booked you both on a two-month vacation? There is no internet or cell service. Just fun, ice cream, and adventure. Let that motivate you to dig in and develop the succession plan and invest in the effort to make it happen.
Whether preparing for the unforeseen or that two-month getaway, the payoff is immeasurable. First, there is a sense of peace and calm that comes over knowing that things are being managed. The dark cloud of “having to do this” slips away, as does the nagging guilt that comes when it’s not done. Second, it is the greatest gift you can give your family and treasured co-workers. It brings them peace of mind knowing that direction and instructions are there for them, as well are easing the decision making that comes with unforeseen departures. Lastly, it frees you to “die in the chair” without the circus.
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