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Are You Prepared to Leave the Business You Built?

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More and more small business owners are selling their companies, with sales hitting a four-year high earlier this year in the United States, and Canada predicting its largest small business turnover ever in the next five years.

“Many of our CEOs are baby boomers approaching retirement age,” says Kathleen Richardson-Mauro, co-author with Jane M. Johnson of a practical new guide, “Cashing Out of Your Business,” (www.richardsonmauroandjohnson.com).

“We’re about to see a tsunami of ownership transitions and Kathleen and I worry that too many of these small business owners are not taking steps early enough to plan for it,” adds Johnson.

Richardson-Mauro, a Certified Financial Planner, and Johnson, a Certified Public Accountant, specialize in helping business owners successfully transition out of companies and achieve their goals. They recently launched an educational website, Business Transition Academy, to help owners plan their exits on their own.

“Most CEOs don’t realize they need to start planning years before they might, potentially, be ready to sell or hand off their business,” Johnson says. “And while a lot of that planning is to ensure they’ll have the money to meet their lifestyle goals, there are other equally important considerations.”

Small business owners tend to pour their lives into their companies and it doesn’t take long before their identity is entirely defined by their job, the women say. In order to achieve a successful after-life, they need to start laying the groundwork early for their emotional separation.

Johnson and Richardson-Mauro suggest these steps for small business owners of any age to begin preparing mentally for their non-CEO future:

• Start now. You never know when you might receive an unsolicited purchase offer or what life events might rock your world. Most owners do not start thinking about transitioning out until some event gives them a jolt: a significant birthday; children graduating from college or starting their own families; illness or injury.

“Planning improves your chances for a successful outcome and gives you more control over the process,” Richardson-Mauro says. “We sometimes don’t realize just how much our lives revolve around our business – or we do realize it and don’t want to think about it because the future looks scary.”

With planning, you can ensure you still have a social life, a sense of accomplishment, challenges, and the other intangibles that make us satisfied and gratified.

• Identify what you want to get from your ownership transition. You’ll have both financial and non-financial goals and objectives. Financial may include receiving enough money to live on for the rest of your life and creating a foundation to further a cause important to you. Non-financial may include regaining balance in your life and following a passion you gave up when you started your business.

Consider goals in every area of life, the authors say, from health, to family, to social connections.

“This is about remembering your true passions, determining what’s most important to you, and deciding what you want to do when you can spend less or no time with your business,” Johnson says.

“This will re-energize you and provide you with direction as you figure out the best way to transition the ownership of your business. It will also enable you to minimize any chance for regrets.”

• Identify your fears, concerns and other barriers that prevent you from planning. Many owners fear what will come next and worry about losing their life’s purpose. Most wonder if they will have enough money to live the lifestyles they desire, and they’re concerned about their employees’ futures, Johnson says.

“Take proactive action to address these concerns by having a family meeting; discussing the future with your spouse; and identifying your actual financial needs. That will allow you to find solutions and work through them,” says Richardson-Mauro.

The two women say they’ve met many business owners who one day just decided they were tired of the headaches and ready to relax. They sold their business or otherwise transitioned out, only to discover they were bored, lonely and unhappy.

“After all of your years of work and sacrifice, you deserve a happy life after business,” says Johnson.

“It’s completely doable,” adds Richardson-Mauro, “with planning.

About Kathleen Richardson-Mauro & Jane Johnson

Kathleen Richardson-Mauro, CFP, CBEC, CM&AA, CBI, has owned and operated five small companies and has successfully assisted more than 150 business owners in achieving their transition goals.

Jane Johnson, CPA, CBEC, CM&AA, started her career in public accounting and finance at General Electric, then established her own practice. Fourteen years later, she negotiated the sale of her firm, retaining all of her clients and team members. In 2010, Jane received the Excellence in Exit Planning Achievement Award from Pinnacle Equity Solutions.

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How to Address Rampant Employee Disengagement? Recognize Human Equity

worldfaceAn alarming Gallup poll published earlier this year is still sending shockwaves throughout the business community: Most American workers either hate their jobs or don’t care one way or the other about them.

Less than a third of Americans are actively engaged in their work, meaning they’re passionate about it, enthusiastic and energetic. They’re consistently productive, and high performing.

Gallup estimates the 20 million who are “actively disengaged” – openly negative and unhappy have a staggering effect on the economy, costing the United States $450 to $550 billion each year in lost productivity.

“To engage the 70 percent of non-committal or ‘actively disengage’ employees,  business managers need to change how they view human capital,” says Trevor Wilson, CEO of TWI Inc., a global corporate speaker, human equity strategist and author of “The Human Equity Advantage,” (humanequityadvantage.com).

“Engaging employees is an issue I’ve been working on for more than two decades, and there is a solution. I call it human equity — the unique assets each individual brings to the workplace that are often unrecognized. Recognizing and leveraging your own human equity, as well as that of your employees, addresses not only the incredible waste of human capital illustrated in the recent poll, but also related concerns business leaders share, including the constant need for innovation. These challenges are not unique to the United States.”

There is a reason why executive royalty, such as Warren Buffet and former General Electric CEO Jack Welsh, sought talent beyond traditional criteria like knowledge and skills, which are also important, says Wilson. He offers a method for uncovering valuable intangibles in employees; he calls it the SHAPE V Talent model:

• Strengths: Consider strength as defined by the 1999 Gallup StrengthsFinder study, which includes “consistent near-perfect performance in an activity.” The study identifies 34 qualities, which can be innate and, unlike skills, are not learned. Individual employees and managers should not force a square peg into a round hole; if an employee’s near-perfect, near-effortless strength is in research and analysis, but not so much in data management, managers should allocate this resource accordingly.

• Heart: Have you ever wondered what comes first, whether you’re good at something because you like it, or you like it because you’re good at it? The chicken-or-egg question aside, what matters is the passion one has for a talent. This includes activities a worker would do even if he or she didn’t have to do it on the job. If a talented manager won the lottery and decided to quit his job, for example, he might be inclined to manage people in a local political campaign or take the helm of his son’s little league team.

• Attitude: There are three general attitudes an employee might have, according to a branch of study in positive psychology. First, there are those who approach their work as a job, who seek only a paycheck and benefits. The second group includes those with a career perspective who seek advancement. The third group views their work as a calling and deeply connects with what they do every day.

• Personality: In 2009, nearly $500 million was spent on personality testing in North America alone. A reliable test isn’t valuable in so much as it reveals differences among workers, which are most likely already apparent. The value of these tests is in showing how and where differences lie. Understanding differences can lead to an appreciation for how and why coworkers perform and improve the synergy of teams.

• Experience: Who is the person you’re sitting next to at work; who is she when she’s not making business-to-business calls, scheduling meetings or troubleshooting technical problems? How does her race, religion, economic background, family situation and overall lifestyle influence – or not influence – her work life? More importantly, how might her life beyond work offer diversity of thought in the workplace? Life experience should not be overlooked when assessing talent.

• Virtue: “Value in action, that’s virtue,” Wilson says. Candor, temperance, courage – these traits preempt problems like public scandals, harassment and discrimination and foster a positive moral pragmatism among coworkers and practical wisdom among leaders. With social media continuing to expose bad behavior and employee morale revealed to be at a stunning low, this is a significant quality in the on-going search for the best talent.

About Trevor Wilson

Trevor Wilson is the CEO of TWI Inc. and creator of the human equity management model. He is the global diversity, inclusion and human equity strategist who regularly speaks at corporate functions. TWI’s clients include some of the most progressive global employers in the world, including Coca-Cola, Ernst & Young, BNP Paribas and Home Depot. TWI’s trademarked human equity approach was instrumental in catapulting Coca-Cola’s South Africa division to the top performing division worldwide.

 

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