KANSAS CITY, Mo. – During the past several months, three people— one very old friend of mine and several folks in the industry who are new acquaintances — have mentioned that they have finally begun thinking about retiring. All three are more than 65 years old…and one major challenge they all face is they also own their own successful small businesses. I get the impression several of them have not given much thought to retiring or business succession until very recently.
One of the three would like to sell his business as he has no family members to pass it on to. He explained he is now affected by a recently acquired health issue he didn’t have before, plus he’s reached an age where standing all day working on meat is just too tough on him physically. The other two business owners have two choices — keep their business in the family or sell them to an interested party.
One admitted he wasn’t sure how to go about selling his business and asked for advice— I suggested that he find a trusted consultant who is expert at selling small businesses. Another great help could be industry associations, which usually can help members with advice on business succession. And of course, your company attorney should also be consulted.
Being an owner of a small business in this industry is extremely stressful and time-consuming. Working many hours a day, six or seven days a week, isn’t unusual for most. Under such circumstances, time slips away before you can start setting some hard plans for your retirement or selling your business. So, although this may seem unusual for younger business owners — the time to start preparing for your retirement and eventually selling your business is now.
Once upon a time, the children of small meat business owners almost always joined the business; one or more would eventually assume their family business’ leadership. Although some of these kids still do, there aren’t as many willing to take the ownership baton these days as before — and for a number of reasons, such as a dislike of working long hours in a harsh environment, the desire to move to a more urban area or strong interests in pursuing a career outside of agriculture. I’ve been astounded over the years to learn of successful business owners who had kids who wanted nothing to do with their family’s successful meat business.
When starting your own business from Day 1, strive to be the best little business in the industry. Not only will this benefit your bottom line, but successful businesses attract potential buyers—both wanted and unwanted. If you have children you’d like to see someday run your business, speak with them honestly and openly about this — and the sooner the better. Should one or more seem eager to accept this challenge and responsibility, start grooming him or her right away.
As in the case of the aforementioned owners, I know two of them have children. One person’s son is currently in the beginning stages of assuming leadership over his dad’s company and his dad confided in me that he and his wife are soon taking their first-ever extended vacation — and the thought of being away from his business that long with his son in charge makes him “nervous”. The other owner has several children, but only one of them would likely be interested in carrying on the family business, he said.
In this business, hours turn into years pretty quickly and the next thing you know you’re approaching, or at, retirement age — and you still don’t have a solid retirement or business succession plan. My advice to younger business owners especially is: Don’t put this off another day because you’ll be 65 years old before you know it. Start planning your retirement and business succession today. Don’t wait until you’re forced to address both — under pressure and duress that could be avoided.