Why business owners struggle to retire

In my years as an executive coach, I’ve had the privilege of guiding many successful entrepreneurs and business owners through various stages of their careers. However, one of the most challenging transitions for any business owner is the move towards retirement.

This phase, often marked by apprehension and uncertainty, stems not just from the financial implications but also from deep-seated emotional and identity concerns. In fact, even though many have their succession plan in place, and their finances in order, some still will not go home.

Losing more than a job

For many business owners, their business is not just their livelihood; it’s their life. Their identity, self-worth, and daily purpose are deeply intertwined with their company. When the time comes to consider retirement, the prospect of stepping away can provoke a fundamental question: “Who am I if not the person running this business?” This identity crisis is a significant barrier to retirement, with many business owners feeling they will lose their sense of self along with their executive title.

Solitude of leadership

Leadership is often a lonely journey. The relentless demands of running a business can eclipse the personal time required to nurture friendships or pursue social activities. Over the years, the business becomes the primary social outlet, with personal connections relegated to the periphery. Consequently, the thought of retiring can seem daunting to those who find their social circles limited to business contacts and associates.

Personal interests

Another challenge facing retiring business owners is the realization that they may not have hobbies or interests outside their work. Years of dedicating themselves to their business often leaves little room for personal exploration or leisure activities. The question, “What do I like to do besides my work?” can be a troubling thought, making the retirement horizon appear empty and uninviting.

Emotional transition

As an executive coach, I advocate for a proactive approach in addressing these emotional and identity-related challenges of retirement. Here are a few strategies that can help ease this transition:

—Identity exploration: Well before retirement, it’s crucial for business owners to start exploring who they are outside of their business. This can involve deep reflective exercises or working with a coach to uncover underlying passions and interests that have been overshadowed by business responsibilities.

—Gradual transition: Instead of a sudden retirement, a phased approach can be less jarring. Gradually reducing responsibilities and delegating tasks can offer the retiring owner a chance to adjust slowly to their new lifestyle while still feeling connected to their business.

—Social reintegration: Encouraging clients to reconnect with old friends or make new ones through clubs, groups, or volunteering can enrich their social life beyond the business environment. This social reintegration is vital for mental health and emotional well-being.

—Hobby development: I often recommend starting with small, manageable activities that can grow into more significant interests. Whether it’s taking a cooking class, joining a book club, or improving your golf game, finding joy in activities outside the business sphere is crucial.

—Legacy planning: Focusing on what legacy they wish to leave behind can give a new perspective on retirement. This might involve mentoring younger entrepreneurs, becoming an angel investor, or focusing on philanthropy.

Retirement for a business owner isn’t just a financial decision; it’s a life transition that requires careful emotional and psychological preparation.

By planning not only for the financial future but also for personal and social adjustments, business owners can redefine their purpose and find fulfillment beyond the business. As they embark on this new chapter, they discover that letting go of their business does not mean losing their identity but rather rediscovering it in a new and potentially more rewarding form.

Patti Cotton is an executive coach to CEOs, business owners, and their teams to help manage complexity and change. You may contact her at Patti@PattiCotton.com.