You own a business…together.
Most couples that are in business together know that in order for them to retire, they’ll have to do something with the business. You’ll either have to sell it to a third party or pass it on to the kids…assuming they have more than a passing interest in the business.
If you’ve been married long enough to have adult children (and you’re still together), you’ve figured out that incessant nagging isn’t a good idea. So, congratulations there.
The process of even talking about this can be both daunting and emotional. So it isn’t unusual for one of the couple to be ready to talk about this part of their future before the other is ready.
It would be great if your business’s preparedness, your personal readiness and your financial neediness all came together neatly at the same time. It would make a perfectly comfortable three legged stool that would provide ideal balance, timing and maximized value.
I don’t think I’ve ever seen that happen.
What I have seen is one of those “nesses” rise to the forefront and dominate the situation.
The first step is figuring out which “ness” is calling the shots.
1. How is your business preparedness? One of the first questions I ask business owners is, “do you have a real business, or do you just own your job?” A business can run without you on site. It has established policies and procedures – that means they are written down, not just in your head. Make sure you’ve transformed your self-employment into a real business before you go trying to sell it to someone else.
2. How is your personal readiness? Your identity is very much tied up in your business. In many ways it is who you are, what you do and how you define your value. I’m not saying all this is healthy, justly likely. Are you ready to lay this down and walk away from it? If you feel a knot in your stomach just thinking about that possibility, you’re not alone.
Years ago a wise friend told me that the first rule of wing-walking is to make sure you take hold of the destination before you let go of the present circumstance. Failure to do so can be disastrous in wing walking as well as in significant life transitions.
3. How is your financial neediness? Are you financially ready to retire? How do you know?
By knowing how much you spend each month personally. And you know how you “live out of your business,” paying for cars, trips, insurance and many other items out of a company checkbook rather than your own. Is your personal debt situation in order? What about wills and insurance policies – had them reviewed lately?
If you sell your business for cash, will you know how to translate that cash into investments that can pay you regular income without running out one day?
Have a conversation with your business partner spouse about the “nesses.” See if you can each identify which of these three is most important to you. You may even come up with more than three.
When faced with retirement, deep down inside, you may find you’re not ready to let go of something that has so powerfully identified you for so many years.
Charles Kettering said, “A problem well stated is a problem half solved.”
So whatever else you two do…get talking about the topic of retirement and succession.
