Our days are numbered. One of the primary goals in our lives should be to prepare for our last day. ~ Billy Graham

What makes greatness is starting something that lives after you. ~ Leonard Bernstein

The Reverend Graham’s quotation no doubt refers to larger issues than business management. However, baby boomer business owners would be wise to heed his words in the context of business exit planning. As retirement draws closer, business leaders must prepare for what comes next.

Financial planning is obviously a critical aspect of exit planning. You need to ensure that you will have assets and income sufficient to support your desired retirement lifestyle. For several reasons – some more obvious than others — planning for the future of your business is just as important.

As I’ve said a number of times in previous articles, the failure rate is high for businesses during leadership transitions. Depending on your personal finances and the structure of your exit plan, your retirement income may depend on the continued profitability of your business. If the business fails, you may not be able to afford the retirement you had planned. In fact, it seems that the majority of business owners overestimate the selling value of their business by a large margin.

But there’s another important aspect of business continuity that may not have occurred to you. As we approach retirement, most of us begin to think about the legacy we will leave behind. The word “legacy” typically conjures up images of children and grandchildren. However, the business you leave behind is as much a part of your legacy as your offspring. You’ve spent years building a business and it has become much more than the sweat equity you’ve invested into it. Your employees depend on your business for their livelihoods. Your vendors depend on your business for sales of raw materials and supplies. Perhaps some local not-for-profit organizations depend on your business for support to help them provide services in the community. In other words, your business is a vital contributor to individual lives, the community and the local economy. If your business fails, those employees, vendors and organizations will lose a source of income and the economy will be weakened. Yes, the entire community is impacted by your business. Despite your many years of hard work to build the business, you will have left behind nothing of lasting value unless your business continues beyond you.

The best way to ensure that your business continues to grow and thrive after you retire is to plan ahead. If you don’t have a succession plan in place, write one now. Identify and start grooming the next generation of leadership, whether family members or employees. Help them acquire the skills and experience to ensure a smooth transition. Review progress regularly with your exit planning consultant and adjust the plan, as necessary.
Your last day is coming. What will be your legacy?