Many business owners are not sure about what to do with the business after they retire — whether to sell or transfer. Very few envision just shutting down the operations but most businesses will end up closing down because there is too little time to get the business ready for the desired path.
As a part of my series about the “5 Things Retirees Say They Wish They Were Told Before They Began Retirement” I had the pleasure of interviewing Rochelle Clarke. Rochelle Clarke is the Founder and CEO of Succession Strength, a company that keeps good businesses in business. She works with entrepreneurs and families in business to protect their business operations and pass them smoothly to the next generation of leadership. Succession Strength recently launched the Retirement for Business Owners educational series for business owners in pre-retirement.
Thank you so much for doing this with us! Our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?
Igrew up in and around family-owned businesses. I started Succession Strength after a death left a relative’s family business in chaos. Without a proper contingency plan and executable succession plan in place, the business succumbed to succession vulnerability and lost the vast majority of its customers. It was then that I decided to dedicate my efforts to helping similarly vulnerable businesses using my expertise in strategy and business continuity combined with the perspective of a behavioral psychologist — often needed to properly address communication dynamics.
Thank you so much for joining us, Rochelle! Can you share the most interesting story that happened to you since you started your career?
Iwas quite surprised to learn how important and broadly applicable communication dynamics are. Ultimately, at the heart of it, we are all humans and, cultural influences aside, the same anxieties and concerns that might prevent one family in business from having a critical conversation in Asia are sometimes the same concerns that prevent a family in the the US or Europe from having a similar discussion. This really opened my eyes to our similarities. We are more similar than we might think.
Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or take-away did you learn from that?
Wow, there are so many. I got my first major lesson communication during my first job out of school many years ago. As a consultant accustomed to communicating in the sometimes fast and direct way familiar in cities like New York, on my first project in the midwest, I quickly learned that this style was not always preferred or effective. After being misunderstood a few times, I then began to slow things down and adopt a more flexible communication style.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
It would be difficult to single out one person in particular. I have been fortunate enough to have had many mentors and sponsors along the way. People who really believed in me and saw potential that I was unable to see at the time. But as an immigrant to the US and the first in my family to pursue business, I have been very fortunate to receive advice, proposals for new roles or jobs, introductions, etc from many kind persons along the way.
What advice would you suggest to your colleagues in your industry to thrive and avoid burnout?
Everybody is replaceable but every body is not. I have learned that it is my responsibility to get to know my own body well enough to take care of it. By doing so, I am better able to identify the signs and either seek guidance when it is needed or take a step back to recharge.
Know your body and know your limits. Although they may try, a manager cannot also manage your health. Make it your responsibility to manage your wellbeing and speak up if and when the need arises. There are many tools available from mindfulness sessions to retreats and sabbaticals to help you manage.
I’ve seen a quote circulated on the internet “You’re killing yourself for a job that would replace you within a week if you dropped dead.” I’m not sure to whom it I can be attributed but sadly, throughout my career, I have seen similar situations that have proven eerily true. You are the only person who is truly responsible for your health and wellbeing.
What advice would you give to other leaders about how to create a fantastic work culture?
Although it may appear to be easier to manage on the outside, don’t try to make everyone into a cookie-cutter ideal. A fantastic culture happens when everyone feels free to bring their authentic selves to work — the inclusion wave that seems to be building. It fosters real connections and that is when some of the best work is done.
Ok thank you for all that. Now let’s move to the main focus of our interview. Retirement is a dramatic ‘life course transition’ that can impact nearly every aspect of one’s life. Obviously everyone’s experience is different. But In your experience, what are the 5 most common things that people wish someone told them before they retired?
In the work that we do with business owners, some of the most common things they wished they knew were:
- Retirement is not always the long vacation that many television ads portray. Your level of savings and preparation will dictate your lifestyle during retirement.
- Your retirement may come much sooner than planned due to a number of reasons out of your control like tiredness and poor health.People are living longer. You may spend as many years in retirement as you spent in your working life. Plan accordingly.
- It takes time to prepare a business for your retirement. It is usually always better to start planning early and adjust than to wait until you are ready to retire. As a retiring business owner, it may take years to prepare the business for your retirement regardless of whether you decide to pass it on to family, sell, or some other variation. Start planning early, at a minimum 5 years before your planned exit.
- Many business owners are not sure about what to do with the business after they retire — whether to sell or transfer. Very few envision just shutting down the operations but most businesses will end up closing down because there is too little time to get the business ready for the desired path.
Lets zoom in on this a bit. If you had to advise your loved ones about the 3 most important financial issues to keep in mind before they retire, what would you say? Can you give an example or share a story?
- Your expenses as a business owner may actually increase after you retire when some expenses like cell phone, vehicle, etc become personal expenses.
- Many business owners decide on the next step/path for the business before first understanding their retirement needs. So they end up getting rid of the proverbial ‘goose that laid the golden egg’ by selling it. Before you decide on what to do with the business after you retire, know your financial needs. For example, don’t sell the business and accept a lump sum payment if what you really need is a long term steady income that may be possible if you transferred the business to a family member.
- Only about 33% of businesses that plan to transfer to family end up transferring successfully; only about 25% of businesses that want to be sold, end up being sold — mainly because of avoidable/controllable reasons like lack of preparation and poor communication.
- Some pundits say to anticipate replacing 80% of your income in retirement but you know your habits. The only way to know what will work is to try living for a few months on the suggested income.
If you had to advise your loved ones about the 3 most important health issues to keep in mind before they retire, what would you say? Can you give an example or share a story?
- If you do not have a plan to occupy your time in a way that gives you a sense of purpose, then your years in retirement will be challenging particularly if your pre-retirement role was heavily involved. Plan to have a place to be, something to do and someone to do it with. Have a plan for your retirement even if you follow it loosely. Having something to do and a good network of people to do it with creates a sense of purpose and the social net to help stave off boredom, depression and other ailments.
- You will still need to be in as good health as possible for the next few decades, so take care of your body with exercise and good eating habits.
- Long term disability is also a potential risk with increasing age. Ensure that you have the right insurance and sufficient amounts of coverage.
If you had to advise your loved ones about the 3 most important things to consider before choosing a place to live after they retire, what would you say? Can you give an example or share a story?
- Know and anticipate your needs. Some retiring adults like my father chose to move to a one-story home to avoid the need to navigate stairs. Other retirees may have mobility issues that also cause them to make similar decisions.
- Even if you own your own home outright, while the mortgage payments may no longer apply, remember to budget for repair, maintenance and other big expenses.
- Affordability is key but ensure that you choose somewhere that is in close proximity to the things/ places that you enjoy and frequent. There was one retiree who lived in a very affordable home in the countryside but all of his favorite activities and most of his friends lived 2hrs away by car. Having to balance his mental wellbeing of being around friends against the cost of accessing them, he eventually decided to relocate to be closer.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I am passionate about helping business owners secure their businesses for the future.
The majority of businesses in the global economy are family-owned. However, the historical success rate of a business transfer is around 30% in the first generation mainly because of the poor communication within the business family and insufficient preparation.
By creating a new paradigm, and putting the tools to securing the business’ destiny firmly in the hands of business owners, I believe that a Continuity Revolution and focus on the business’ long term survival could really open the doors on what used to be an unknown and inaccessible industry for everyday business owners. What was once a chore — planning for the longterm continuity of a business, can suddenly become almost second nature for business owners.
Succession Strength has taken the first step in enabling every-day business owners to take control and take the fate of their business in their own hands through education and practical tools as well as in-person guidance.
Is there a particular book that made a significant impact on you? Can you share a story?
The first book that I bought for myself after receiving my undergraduate degree was Smart Women Finish Rich by David Bach. As a recent graduate and immigrant to the US, I lacked the financial savvy and was unfamiliar with the tools available to help me manage my finances. Bach’s book was a really good primer to help me develop the mindset to manage my affairs.
Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?
My favorite Life Lesson Quote would be:“You can’t let praise or criticism get to you. It’s a weakness to get caught up in either one.” — John Wooden
I have been fortunate in life to experience some personal highs and I have also received criticism along the way — as we all have. But I’ve learned to acknowledge but stay humble during the highs and to critically assess the criticism which, with good intent, has often been a rich source for my learning and development.
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Thank you for these fantastic insights. We wish you only continued success in your great work!