Well, unfortunately there’s no light that turns on or horn that honks when you know in your heart that you’re ready.
I do know from lessons learned in 20 years of dealing with exit plans that there are three things that will make the process flow more smoothly:
1. Start with the end in mind.
2. Think strategically about how you will find your successor, including a marketing plan.
3. Get professional guidance.
Many times the decision to retire comes about from pressure from a spouse or children, a financial situation, or a health issue. Other times the company is experiencing a high level of change, whether from employee turnover or new technology, and the owner decides enough is enough.
In each of these examples, external factors are putting pressure on the owner to step down.
Ideally, the owner with retirement on the horizon should be striving for a retirement at the top of his or her game. The company should be profitable for a 3 to 5 year period. Employees should be happy and stable. Equipment should be updated and paid for. The real estate should be valuable. Costs should be under control. And the number of new customers should be on an upswing.
In reality, it’s hard to have all of these factors optimized at the same time. Companies just don’t grow that way.
If you’re looking at retirement, think about what you’d like your company to look like once you’re out of the picture. Start the process of creating that kind of company now. It will be much easier to mentally prepare yourself to retire if you know the company -- your “baby” -- will be taken care of once you’re not in charge.
Retiring is a big step. Retiring from your own company is an even bigger step. Take time to plan now so you can act on your vision when the time comes.
Rock LaManna is the author of L&NW's popular The Bottom Line column. Rock helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path. He is President and CEO of the LaManna Alliance, and provides guidance on how to grow a printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan. Rock can be reached by email at Rock@RockLaManna.com.