Stepping out of and into business ownership are huge career and life transitions. Owners stepping out have reached a high level of competency and need to transfer the knowledge of what they do and how they do it to their successors. Organizing that transfer is just one reason we include a Transition Timeline™ in the Transition Roadmap documents we create for owners and their successors.
Business owners, however, don’t just step out of ownership; they also step into the next great adventure of their lives. And that transition from business ownership to Next Adventure™ affects their personal lives, relationships, attitudes, and sense of self.
Today, we focus on the opportunities and challenges owners commonly encounter in transitioning from business owner to former business owner. Successors have their own transitions to make: they step into ownership, leadership and their Next Adventure while stepping out of their roles as student and one-day successor. We’ll focus on successors in a future post.
The Challenges of Letting Go in Business Transitions
In Transitions: Making Sense of Life’s Changes, author William Bridges argues that common to all of life’s transitions is letting go whether it’s letting go of childhood, adolescence, relationships with friends, spouses or children (through death, divorce or estrangement) and yes, even career transitions.
In leaving a business, knowing when and how to let go is critical. Owners who can’t let go of the known, rob themselves of the opportunity to design new lives and, too often, frustrate successors who are ready and eager to step into ownership.
No Longer “The One”
Employees, vendors and colleagues look to owners as the ultimate authority. Being “the one” can be tiring, but it also gives meaning: Owners are responsible for the welfare of their employees, their families, customers and, by extension, the health of the communities in which they live.
Relationships
Stepping out of ownership means an end, or at a minimum a significant reduction, to daily contact with employees, vendors, and colleagues and much more contact with spouses and other family members. That switch can be more difficult than many owners anticipate.
From Earner to Saver
Much has been written about the transition from earning money to managing it and learning to live on a “fixed Income.” This challenge can be especially difficult for business owners whose (1) companies are their greatest asset, and (2) financial security depends on the proceeds from the sale of their equity.
The Opportunities of Letting Go in Business Transitions
A Next Adventure By Design
In our practice, we call the phase of life after transitioning out of a business an owner’s Next Adventure™. Ideally, that phase is just as meaningful and fulfilling as their previous life as owners, so we help owners dig deep to identify the activities they’ve always wanted to try, where and how they want to live and with whom they want to spend their time. Designing one’s life is exciting, scary, time-consuming and yet integral to enjoying a satisfying life as a “former owner.”
It’s Not Just About You!
Owners do themselves a disservice when they overlook the wants and needs of the important people in their lives as they approach their Next Adventures.
Business owner “Jerry” had always dreamed of buying a boat to sail along the East Coast and through the Great Lakes. Learning to sail and buying a boat would take months, as would the trip itself. When Jerry told his wife (“Terry”) about his plans, she did not jump onboard. Terry wasn’t a fan of boats and didn’t want to take months away from her charitable activities, friends, children and grandchildren. She proposed buying a recreational vehicle so she and Jerry could explore and visit children living in states other than their own.
Jerry had overlooked a critical principle of transitioning out of ownership: It’s not just about you!
After much discussion, Jerry and Terry came up with a compromise: Jerry would buy a boat and take the trip with Terry’s brother (a seasoned sailor). Terry would meet them at various ports and, at the end of the trip, Jerry would sell the boat and use the proceeds to buy an RV.
Spending Time in the Neutral Zone
In Transitions, Bridges compares the discomfort we feel when leaving one role or relationship and beginning another to crossing a street. He acknowledges that being in the street, or in the “neutral zone” as he calls it, is uncomfortable. “One would be a fool to stay out there in the middle of the street any longer than necessary; so once you step off the curb, you move to the other side as fast as you can.
Rushing through the neutral zone is the natural reaction to discomfort. When owners experience discomfort after leaving their companies, some start new businesses similar to the ones they just left. Frequently, they find that they don’t get the same thrill running a start-up like they once did. More successful are the owners who spend time in the neutral zone yet minimize the time they spend there by thinking about, talking about and experimenting with various activities before they leave their businesses.
Had Jerry talked to his wife about his plan, she would have told him that she was not interested in being his first mate. Had he learned to sail prior to leaving his company, he might have found that sailing on weekends scratched his itch to sail.
Planning a Next Adventure
As Transition Strategists, we help owners organize the transition of their companies using The Big Six™ questions (Why, What, When, Who, How and How Much). Several of these questions prompt owners to think practically (rather than theoretically) about their Next Adventures.
- Answering the question of Why they want to transition out of their companies and into their Next Adventures involves imagining all facets of their life and relationships after ownership.
- Answering the question of What involves identifying all the components of a business and deciding which to transition and which to keep. In that process, one owner decided to keep a tiny division that her successors really didn’t want and would likely have jettisoned. After taking some time off, she built a consulting company around that division that she could run part time from her son’s fishing lodge in Alaska.
- Similarly, the question of When is as much about a successor’s readiness for a transition as an owner’s. After creating a timeline to transfer knowledge and responsibilities from owner to successor, some owners extend it to (1) give themselves time to engage in activities they think they’d like to try; and (2) give their successors a chance “fly solo.” These practice flights tell owners and successors where the transition of knowledge has gone well and where there’s more to accomplish.
Unintended Consequences
No matter how carefully planned, no life or business transition goes exactly as planned. People change, circumstances change, and actions have both intended and unintended consequences — both positive and negative.
And yet, taking time to create Transition Timelines for owners and successors increases the odds that the transition will achieve owners’ most important goals for themselves, their families, their successors and their companies. If you are an owner or successor who wants to learn more about letting go and maximizing the odds of a meaningful Next Adventure, give us a call. We’re happy to share how 100% of the owners who have used our transition process go on to live fulfilling Next Adventures while leaving behind successors and companies prepared to succeed.
We know every transition journey is unique, and we’ve developed resources to support you wherever you are in the process.
- Join our monthly workshop to learn proven transition strategies
- Explore programs designed for your unique journey
- Access free tools to start mapping your path
- Meet Elizabeth on Collective Conversations for personal insights