When business owners start looking at their golden years, they often think about selling the business for a big pile of money and leaving the stress of business ownership behind. However, this could be the worst plan for your business. Sometimes, active individuals find that they don’t enjoy constant idleness. Plus, if you retire and invest the proceeds, you leave yourself at the mercy of those investments. What if you sold your business in 2007 and invested the proceeds in the stock market?
What if there was a way to reduce the stress of business ownership but not have to risk everything on the stock market? For many business owners, we suggest Half-Retiring instead. Rather than selling your business, make it work for you.
Half-Retirement allows you to stay active and engaged while making time for travel, leisure, and simply less stress. We find there are some changes you need to make before you can make the move. There are three philosophies you must adopt in order to move to the Half-Retired mindset:
Move from working income to equity income.
Most business owners engage in many of the daily tasks associated with the operation of their business. This can include a wide range tasks from sales, management, or simply high level “grunt” work. Doing this work makes sense in a business that is your full-time job. It allows you to save money while also having a finger on the business’s heartbeat.
However, most successful entrepreneurs know at heart that a lot of the work they do does not have to be done by them. They may do that work better than their staff, but there is a difference between a staff that cannot help and one that doesn’t do it the way you’d like. When you are able to do this, you are able to move from earning your money by operating the business to earning your money from owning it.
Get rid of the grunt work by delegating to someone else. You will also need to streamline your business in ways that make it more profitable. This way, you can take profits instead of just taking a paycheck.
Focus on the “Picasso Work”
What makes a painting a valuable masterpiece? It must be painted by a master artist, right? What does “painted” mean? Technically, “painted” can mean simply touching the brush to the canvas. The artist need not set up the canvas, mix the paints, or even decide what setting will be painted.
The same is true for you. You call work that you do X, but there are many steps to X, not one. Some of those steps do not require any special skills or talents. Some do. We call the steps that only you can do the Picasso Work. Your special talents are required for that small portion of the process. However, the rest can be done by others. By trimming your work down to only the Picasso Work, you can continue to earn well and get the freedom you want.
Develop a system you can trust
Most businesses are built around the people that work in them rather than systems. This can cause a great deal of unpredictability and instability in the business. Knowledge can easily leave with key players. New systems have to be worked out around new employees’ skills and preferences. In the end, it means needing more hands-on work from you.
A business model where the people work inside strong systems allows the business owner a much better opportunity to retire. A tight system can be run by anyone. When you develop concise, easy to follow processes for every task, you free yourself from the obligation of full day-to-day participation. The business becomes more self-sustaining, allowing you to balance your time at work with the rest of your life.
When you have developed these philosophies and put them into play in your business, you are in the right space to advance to Half-Retirement. You’ll earn more, stay more active and enjoy a wider range of opportunities than full retirement could ever give.