“Stockholm Syndrome” is a term that is used to explain a psychological phenomenon where hostages can sometimes develop positive feelings and a bond with their captors. Strangely enough, it is possible for the phenomenon to extend its grip into aspects of our lives, like business ownership.
Initially, business owners talk about their business like it is a jailer, keeping them away from their family, friends, sports and hobbies. Business owners will tell everyone of the stresses and burdens of ownership, the compromised weekends and holidays answering emails and dealing with issues back in the practice. They will say that it is a necessary evil in their lives to facilitate their financial freedom.
Yet strangely, when they have achieved financial freedom and can afford to retire, when they are reaching the final decade or so of their career…and all things point to it being a good financial time to start looking at selling…many business owners will choose to delay or avoid exit planning and hold onto business ownership far longer than they need to.
Why is this?
For many, whether they can admit it to themselves or not, business owners can get to a point where their “jail” has become the only home they know. A place where they have earned a respected identity, where they have predictability, and their lives make sense. They get to a point where they have dedicated so much time and energy to the practice over the years that they have compromised their other passions in pursuit of their career. Even though selling makes total sense for their financial wellbeing, health and stage of life…they simply can’t picture themselves without their business anymore … and this can lead to many detrimental consequences.
Understanding how Stockholm Syndrome can manifest in business ownership is crucial for safeguarding a business owner’s mental health and promoting effective financial decision-making when it comes to selling your practice.
So, what can we do about it? Here are 3 ways that you as a business owner can ensure that you don’t fall victim to this syndrome:
- Make a point of actively maintaining your identity beyond the business
Business owners need to make a conscious effort to maintain hobbies, interests, family roles, community involvement and relationships outside of the practice. Prioritising time in these other parts of your life will help you reduce the importance of the practice as part of your identity and help mitigate the fear of loss of purpose or identity crisis that is often experienced during retirement.
2. Embrace a post-sale transitional period
Embracing transition periods post sale, by gradually reducing involvement in the business for a few years before full retirement, can help you:
- Make the practice more attractive and get better offers from buyers, as it can significantly minimise the risk of buying the practice.
- Gradually acclimatise to the changes in your lifestyle and routine, reducing the shock of sudden retirement.
- Dedicate time to the cultivation of post-sale identity described in point 1.
3. New chapter mindset
Instead of viewing retirement as an endpoint, frame it as a new chapter, filled with opportunities for growth, exploration and self-discovery. Cultivating gratitude for past accomplishments and excitement for future possibilities can help business owners embrace the sale of their business with optimism and enthusiasm.
For more articles on “Selling a Practice: Timing your sale and Retirement”. Click here:
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- Retirement: Is it better to jump out or fade away?
- Exit Plan...or put your head in the sand