Craig McIvor: The boss's last big challenge: Bowing out gracefully

While the statistics from a recent Colmar Brunton survey suggest New Zealand has a large group of ageing business owners, predictions of them selling out in the next three years are unlikely to eventuate. The recession and falling incomes have put many of these plans on hold.

Above and beyond the economics of their situation, many simply cannot see beyond the role they are performing. The actions and planning needed to vacate the business or to get alternative management in place is beyond their skills.

For a business owner to decide to exit their business, they need to consider two things: they must have a vision of their life after they leave that is more attractive than staying; and they need to know how to make the transition.

Unfortunately, many business owners have neither and are resigned to their fate until other stronger forces dictate a change. So what makes a business owner decide to exit his business? There are many reasons, but ultimately there has to be a driving force to break a lifetime of work.

On the one side they have the job they have done for a long time and security of income. They have a sense of purpose, a daily ritual. They have a feeling of responsibility and power. Some owners are so immersed in their businesses that their persona cannot be separated from it. They only exist in this space.

But on the other hand, what do they have? If they are working 70 hours a week, there is little time for other activities. A business owner will have worked hard at building their business up to a certain size and profitability. During this time the business has left little time for the hobbies, travel or dreams they aspired to when much younger.

When an owner considers leaving his business, it is an acceptance that they will need to confront the unsatisfactory nature of their non-work life.

Usually it is external factors that force a shift in perceptions, such as a health scare for the owner or a family member that creates enough emotion to force the business owner to consider quitting. More recently, a lack of desire to reinvest in the business combined with the downturn has forced third parties such as banks to give owners their marching orders.

Much has been written in recent years about models that owners can use to leave their business. These deal with the practical steps, not the psychological ones. Setting up an advisory board, replacement management and/or other exit plans usually require an externally driven mind-shift in the owner. Unless the owner engages someone to help them on this path, it will rarely eventuate.

Many owners live by the old maxim: "If you cannot find a way out, get further in." Unfortunately, this path will lead to a further erosion of their business's value and potentially a forced sale in the future.

Owners who have been able to gradually move from full-time to part-time work find their new life is not as good as they expected. One owner recalled how he told his wife that, now he was retired, he would come out to lunch with her and her friends. He was greeted with the stark reality that his wife, after 20 years without him, did not want him in her day-to-day life.

The age-old favourite post-work dream is to go fishing or travelling. The reality is that after a few trips on your own, the comforting arena of the work environment, where you were respected and revered, is a far more attractive proposition.

The trick to the transition is to gradually work towards retirement or semi-retirement. Here are some suggestions for how you can achieve a retirement that will not see you back at work after a few weeks.

Start now. Your new goal is to run the business and work on your non-work life and develop an exit strategy. This means you will have to work harder before you can start to take it easy.

Engage professional assistance to help you work through a succession/exit plan. The plan is likely to take different forms depending on your own objectives, the strength of the business and the timeframes involved with each.

Involve your family. Tell them your plans about what you are going to do with your life. It is best not to suggest that they will be your retirement plan! Making a commitment to your family about the timeframes involved will certainly assist in cementing your resolve.

Start to visualise what you would like to do with your time. Every plan has to have something in it for you.Think about what you need to make this a reality. Write it down and carry it with you. Read it often.

Start trialling your ideas. If possible, take some time out to give them a test run. If they don't work out, toss them and go to the next one on the list.

Plan to keep an interest in your business if you want to. A board or advisory position will allow you to satisfy your interest in the business from arms' length.

Smile. Keep thinking about the new life you will be having and how important it is for you to get there. If you are healthy and happy, you will be amazed at how happy you will make others. Naturally, if you are selling your business, and it does sell, then retirement will be quickly realised. All the more reason to start now.

Working in the same role and field for a long time is akin to a serious addiction. Like all addictions, it is hard to kick and some pain is involved in the process. Stay the course and try to apply some of the dogged persistence you applied to your own business in your quest for a new life after work.

Older by the day

* 62 per cent of business owners are over 50 years old.

* 23 per cent are over 60.

* 45 per cent aspire to retire in the next five years.

* 11 per cent have a formal plan for succession.

Source: ANZ Privately-Owned Business Barometer, 2009, based on Colmar Brunton survey of privately owned businesses with annual turnover of $10 million to $150 million.

Craig McIvor is the managing director of Corporate Management Advice.

www.managementadvice.org