Do a little math with us real quick:
How many hours a week do you spend working in your business?
And, how many hours a week do you spend with your friends or family?
How many of those hours do you actually spend thinking about your business instead of your friends or family?
There are 168 hours in a week. However, studies show that nearly one-third of business owners work more than 50 hours per week, while 86% work on the weekends.
According to Forbes, “The number one sacrifice owners make each year is not taking a vacation. More than half (60%) only take one vacation per year; nearly one quarter (23%) take fewer than two vacation days annually. When they do go on vacation, more than 75% still work.”
Learn how to incorporate your personal planning into your business strategy.
Decentralizing an Owner from Their Business
Owners like to have their stamp on every aspect of their business, but most do not realize how detrimental this can be to the success of their company. A business will fail if it is dependent on any one person’s individual successes. So, if you are an owner and find yourself working late each evening, spending hours on the weekend troubleshooting problems, and taking time away from your family on vacations to handle a work crisis: your business is too owner dependent to succeed after your exit.
Jan Graybill, Senior Partner at Legacy Planning Partners, shares, “The owner whose business is extremely dependent on their involvement has a significant overlap of personal and business financial issues. The measure of financial success is more than likely entangled between personal and business goals. Rather than seeing their business as an investment with an ROI, they see it as a resource of lifestyle income. These owners often have between 80% – 95% of their wealth tied up in the business. This results in extremely high personal financial risk. Meaning the future of their personal financial success is almost completely dependent on their business success.”
One of the easiest ways to build business value – and limit the amount of time you as an owner spend working outside of traditional work hours – is to decentralize yourself from the business. If you cannot trust your second in command to manage the business while you take a well-deserved vacation this summer, it is time to reevaluate your business processes. As an owner, the best way to build value in your business is to build it independently from your successes. Invest time and resources in training leaders in your business so they can run your business well after your exit.
What are Your Personal Goals?
In order to have a meaningful life, you’ll need to cultivate your strengths, talents, and capabilities and use them to benefit yourself and others. People who have a clearly defined purpose in life live years longer than those who have no sense of purpose. According to an article published in Forbes, “Spend your time now figuring out what you enjoy doing, so that when you’re retired and have the additional time, you can spend that time doing what brings you happiness. Maximize your time during retirement by focusing the pre-retirement years on discovering what brings you joy and fulfillment.”
Before you retire, think about the things in your life outside of your business that give your life meaning and purpose. Perhaps it is spending time strengthening your family relationships, tending to a garden, or expanding your knowledge by reading about topics that interest you. Whatever gives your life purpose should have a place in your post-business life.
Are You Prepared for Your Next Act?
Finding and living according to your purpose benefits not only you but important members in your life. Your purpose plays a crucial role in determining your personal next act plan and will ensure your life post-exit will be fulfilling. Living according to your purpose not only impacts your next act but allows you to live your optimal life today as well.
Jan Graybill, a professional advisor to owners with over 40 years of experience, shares, “Business owners normally know their business P&L, Balance Sheet and KPI’s. But when it comes to knowing their personal balance sheet, personal P&L, and personal financial goals, they draw a blank. However, these are the issues they need to deal with if they are ever going to have a successful exit. They are also the issues that once identified and monitored inside of a financial plan that lead to more favorable outcomes.”
By managing your energy and optimizing your current life, you are able to explore your passions outside of your business. Passions that can ultimately make up a large portion of your next act. While our 2013 State of Owner Readiness Survey found that 75% of owners profoundly regretted selling their business within a year, having a defined personal purpose greatly lessens that regret. Some owners may even feel more fulfilled personally than they ever were in their business.
Learn more about the impact of personal planning during your exit planning in our upcoming whitepaper, “Walking You Through the Perfect Exit – Personal Purpose-driven, Next Act Planning.”
Follow our socials for more exit planning content and strategies.