The unexpected (and normal) emotions of business transition planning
Prepared for the emotions of business transition, business owners making their exit can find comfort in seeing their life’s work handed over to capable hands.
By ATB Financial 20 March 2023 4 min read
We understand that transitioning from your business isn't a one-size-fits-all experience. Every business owner's process—and emotional process—will look different. A range of emotions is normal to experience as you make the shift, and being prepared for what you could feel along the way can set you and your business up for thriving during and after the transition.
Acknowledge the emotionality of retirement and seek out new purpose
Making the shift towards leaving your business is a major decision, one of which may be a feeling of grief. “If you are experiencing feelings of sadness or grief, those feelings are real. It’s completely fair to acknowledge those feelings and mourn the release of something you’ve worked so hard to build. Don’t be afraid to seek out support processing those feelings,” says Amanda Vella, Business Advisory senior director and transition consultant at ATB.
She adds, “How you process this phase will have a lot to do with the life you lead after exiting the business.”
You may feel unmoored when you begin to realize how transitioning out of running your business could leave you with large amounts of time that used to be filled with non-stop entrepreneurial activity. According to the Harvard Business Review, many business owners “overlook the psychic benefits of their companies, particularly the sense of community and purpose.”
A perceived loss of identity can be challenging for some people accustomed to having their reputation and day-to-day routine tied to running their company. It could be helpful to begin seeking another community, peer group or non-profit to join in order to fill those retirement hours and help you see who you are outside of your business.
“If you can find another outlet, it can put back some meaning into your life,” says Vella.
Minimizing succession stress for loved ones
There’s a potential for added stress stemming from family businesses that don’t plan ahead for the next line of successors. “I can see how families would be devastated because the business owner didn’t plan how their departure would impact their families, with the fallout being, for example, children fighting over who takes control of the business,” says Vella, who notes how integral it should be for business owners to table a transition plan (along with a succession plan) years ahead of any expected transition.
The exhaustion of selling
Going through the selling process can be taxing on both mind and body, Vella says, but what helps is identifying the goals of the business upfront so you can weed out successors or buyers who don’t meet those criteria.
“If one of your goals is to ensure the next owner retains the business in the same community, for example, or the buyer is from the same community as the business and the employees, that can be worth laying out from the beginning,” she says.
You might also have an approximate figure ready for when buyer offers begin to roll in. “Have a number in mind that you would like to see your company sell for, because that will give you a benchmark to work with,” Vella advises.
It can be tiring to vet through acquisition offers, if that’s the direction the business is headed, without having clear values in place that separate your top contenders from the crowd.
Due diligence is another part of the selling process that can be laborious for managers who don’t prepare for it. “Years in advance, business owners should be putting their financials in a data room and anticipate the questions they’ll be asked about their data and the hundreds of documents they have on file,” Vella says.
If an executive from the company is poised to take the corner office, it can only help both of you to spend time to discuss your managerial responsibilities and what they should expect as the new leader of your former business. Having one-on-one time with a leader who’s been in the trenches could help them feel more at ease when they shoulder more obligations. Also, it can be comforting to know an experienced employee will continue the legacy you began. Peace of mind goes a long way after the hard work—logistically and emotionally—you’ve put into transition planning.
The relief of closing
When you reach the closing stage of your succession plan, you might be washed over by relief and even joy. The transition planning journey can hopefully be seen as a learning experience.
How this helps you later in life depends on your next step as an entrepreneur. But a less obvious benefit is how this successful departure—with all of its accompanying emotions—can reveal to your company’s staff, partners and customers how business leaders can hand over a business with grace and level-headed preparation.
Learn more about selling your business successfully with ATB’s Business Transition Guide. Want tailored advice for business transition planning? Reach out to our Business Transition team at email@example.com.
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