What’s Next?

Planning for The Next Phase of Your LifeA look at how to plan for and transition for a life beyond leading a company

TRANSFORMING VISIONS INTO RESULTS

FEDERERPERFORMANCEMANAGEMENTGROUP, LLCWHITE PAPER

2 WHITE PAPER: What’s Next: Planning for The Next Phase of Your Life

It takes great courage to think about what’s next, and failing to do so is actually a selfish act that stands to negativity affect clients, employees, and owners’ families. An exit strategy should be in place the day a business is started to ensure continuity of care for those three groups of people. Everyone who owns a business understands the need to have a carefully designed

succession plan to ensure the sustainability of the operation for the long term, starting

with a smooth “handoff.” While it sounds rather easy to draft and implement such

a succession plan, reality is far different—and one of the biggest stumbling blocks

are owners who just won’t let go, often because they don’t know what is next.

TABLE OF CONTENTS:

How to Execute a Smooth Succession 3

How to Determine What’s Next 5

How to Find and Pursue Your Passions 7

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Increase Lines of CommunicationCommunication is at the center of any business succession plan. Always be open – and always be

painfully honest. Lack of communication can cause rifts among valued employees and can cause

resentment to grow. Establishing increased lines of communication among all players, and drafting

conflict resolution parameters can help nip issues in the bud, and lead to a smooth succession.

Develop a Governance StructureLack of information and direction can sabotage a company from the inside. In the period

leading up to your succession, there will likely be confusion and fear about the future of the

company. Long-term employees who have been instrumental to the success of your company

for many years will wonder where they fit after your departure – and some will hold strong

beliefs that they, not your chosen successor, should take the reins in succession. Creating a

clear hierarchy and governance structure in the months and years before your departure will

eliminate confusion and clarify the company’s structure going forward.

Establish an Advisory BoardNot every business dispute can be settled in-house – at least not quickly enough to prevent it

from negatively affecting the business. Establishing an informal advisory board to help arbitrate

disagreements and guide decisions can go a long way towards creating a smooth succession. This

independent advisory board should guide decisions based on the company mission statement.

How to Execute a Smooth SuccessionA smooth succession requires, first and foremost, the ability to be honest with yourself about your goals

and desires for both your business and your life after retirement. Once you have a clear and honest vision

established, it’s time to implement a detailed plan and tactics that will help succession go as smoothly as

possible. What does that look like? Here are a few examples:

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Hold Monthly MeetingsTrue, open and honest communication isn’t an event – it’s a practice. Information changes.

Feelings change. Unforeseen events happen. That’s why it’s a good idea to establish a

standing monthly meeting among leadership in the business. This will allow you to address

concerns, communicate initiatives and deal with issues as they arise. It will also give your

business leaders a scheduled, open forum in which to speak their minds.

When establishing a succession plan, communication should be at the center of your strategy.

The more openly and honestly you communicate your intentions, the easier your transfer of

power will be – and the more successful your business and your legacy will be going forward.

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As such, we have a set of questions that can be invaluable for business owners to ask themselves

as they contemplate their succession plan and post-business life:

• What will my calendar look like? (How will I fill my days?)

• What will keep me from snooze button overuse? (What will motivate me to get out of bed?)

• How will I retain valued connections? (Who will remain in my social circle?)

In answering these questions, business owners are actually participating in the process of

creating a whole new world for themselves—a world that must have purpose and ways to

measure success that are much different than those found in a corporate setting.

Notice we didn’t say it is easy, because it certainly is not. It takes a good deal of work for

business owners to basically recreate their identities, since their entire lives have been focused

on one goal that is no longer applicable: being a successful entrepreneur.

Those who fail to create a clear picture of what their lives will look like after transitioning

out of the business are the ones who often inadvertently sabotage their carefully designed

transition and succession plans because they keep hanging on for dear life, to the detriment

of themselves and their businesses.

On the other hand, those who are able to seamlessly transition from their business—doing so with

grace—are providing their successors with a great gift: the ability to take the handoff and run with it.

Asking (and Answering) What’s Next? Much of the reticence to put together a succession plan and retire comes from uncertainty about what’s next or

what happens during “retirement.” Even the word “retirement” can have negative connotations, implying that

an individual is no longer contributing to the working world or the community. It’s difficult or tough to for from

a lifetime of entrepreneurship to shifting gears away from the traditional working world.

With a clear focus on what comes next, it becomes easier to step away from what’s known and comfortable to enter into an exciting new chapter of life.

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Finding Your PassionWhen you own your own business, it’s often your vocation and avocation. In a word – it’s your life. When it

comes time to move on from your business and retire, though, this can be a problem. Too many business

owners fail to take the necessary planning steps to transition their companies to the next generation of leaders,

waiting until the last second to relinquish control. It’s not because of ignorance and it’s not because of laziness.

According to a recent survey, 80% of business owners believe that a successful transition will come from planning

and action items – but only 38% of owners have taken steps to plan their succession. Why? The answer is emotion.

Entrepreneurs, understandably, are emotionally connected to their businesses. Many have very few outside

habits, as running a business is more than a full-time job. Not having a passion outside of work, however, is

one of the main reasons business owners have such a difficult time letting go. If you don’t have a hobby, and

you plan to retire from your business soon, it’s time to get one.

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Give Yourself PermissionFor many business owners, having a hobby outside of work isn’t just difficult because of lack of

time – they experience feelings of guilt if they are not spending every waking hour managing

the business. The first step in successfully transitioning out of your business is giving yourself

permission to enjoy a personal hobby outside of work. Don’t go cold turkey – start small.

Spend a day a week outside of the office, trying out new hobbies, spending time with your

family, or connecting with old friends. Planning to transition out of your business takes years,

not months, so you’ll have plenty of time to discover a new passion. Letting go can be painful,

but it’s necessary. The more important you are to your business, the less valuable it will be

after you’re gone. Breaking away slowly will allow you to gradually transfer power while

simultaneously becoming more comfortable with your newfound freedom.

Find Something to Get Excited AboutYour business is your passion. Now it’s time to transfer that passion into something

else. Explore a variety of activities that fit your personality. If you are a social person,

find something that involves spending time with people – be it joining an active group

or volunteering with a local charity. If you’re driven by competition in business, find

competition for pleasure – golf, racing, poker, etc. Perhaps you’re ready to leave your

business, but not business altogether. Try becoming a mentor to a younger businessperson.

Whatever you choose, it may take some time to embrace your new life.

Behavior is much easier to change than feelings, but eventually, you will embrace and enjoy your new

direction. As you begin your transition, remember to always be present in what you are doing. You don’t

want to be thinking about purchase orders in the middle of your backswing. And when you take time off,

really take time off. No phone calls, emails or texts. No popping into the office to see what’s going on.

A smooth business transition takes about 5-10 years. Start “leaving” your business in steps – take

vacations, work remotely, come in later, exercise, take a class, allow yourself to think differently. You – and

your business – will be better off in the end.

Ready to find out What’s Next? Contact us today to ensure a seamless transition for you and your business as you plan for retirement.

TRANSFORMING VISIONS INTO RESULTS

FEDERERPERFORMANCEMANAGEMENTGROUP, LLC

For more information:VISIT www.federerperformance.comCALL 813.876.7191EMAIL info@federerperformance.com