By Dave Driscoll
The emotions surrounding selling your business are certainly strong regardless of your age, but the economic and social climate in which you grew up impacts how you approach planning for that inevitable event. Considering these generational influences can help provide a more objective perspective toward your business…and your Life After Business.™
Millennials/Generation Y: Business owners between 25 and 39 years old The youngest owners seem to have figured out the simple truth that you no matter how much you love your business, it can’t love you back! Typically, members of Generation Y prize entrepreneurship and the associated flexibility. The emphasis is on working smarter – using (and inventing) technology and collaborating with others to accomplish goals. This technology generation grew up learning new, better ways of doing things quickly, and they are typically not afraid of change. Millennials often engage their passions to further causes while earning money. Serial entrepreneurs live this emphasis as they begin and/or acquire multiple companies throughout their careers as their skills, interests, and needs (personal and societal) evolve. Solid investing and financial planning from a young age will prepare this group for their eventual retirement.
Generation X: Business owners between 40 and 58 years old
Generation X business owners fall somewhat in the middle of the spectrum…they crave a healthy work-life balance but may also have a higher debt load than other generations, necessitating a financial focus that sometimes conflicts with a desire for more leisure time. Members of Generation X are generally considered direct and open to feedback, teamwork, and building relationships. This generation began careers before widespread use of the internet and has embraced technology tools while also retaining the importance of people skills. As they age, this generation of business owners may utilize technology to spend more time physically away from the office, delegating responsibilities to peers, while still being available as needed for big decisions and crises. A crucial part of exit planning for this generation involves grooming a second-in-command and leadership team to build business value and reduce owner-dependence.
Baby Boomers: Business owners 59 and older
For Baby Boomers, the expectation was long-term loyalty between employees and companies, climbing the corporate ladder, and a pension to reward that longevity. Changing careers or employers was met with suspicion. Even more so than other generations, baby boomer business owners view their businesses as an integral part of the community and, by extension, see themselves as community leaders. To many boomers, the thought of selling their company feels like selling out their employees and disappointing their community. In addition, workaholics were invented by this generation, with self-image strongly tied to career success. This causes many owners to feel conflicted when considering giving up their leadership roles. While they realize deep down that they need to sell the business to fund their retirement, they agonize over how that will impact their employees, their status in the community, and their family life.
Older business owners grew up in a time when hobbies were impractical or discouraged. You went to work while your wife tended the kids (today more than half of businesses are started by women, but those were different times), you ate dinner, you watched the news, and you went to bed. With few hobbies and nothing besides work to define them, business owners in their late sixties, seventies and eighties feel lost without their business, which is why so many procrastinate rather than selling. Unfortunately, too many owners hold onto their businesses too long. The changing market and dwindling enthusiasm often destroy their business value and jeopardize their personal wealth.
All owners need to maintain a healthy emotional separation between their identities and their business. Creating and revising realistic exit plans throughout your business and life cycles is essential to maintaining balance and achieving the Life Beyond Business™ you deserve.
Dave Driscoll is president of Metro Business Advisors, a mergers & acquisitions, valuation and exit/succession planning firm helping owners of companies with revenue up to $20 million sell their most valuable asset. Reach Dave at DDriscoll@MetroBusinessAdvisors.com or (314) 303-5600. www.MetroBusinessAdvisors.com