Creating a succession plan and ultimately retiring are pivotal—and often very emotional—moments in a small business owner’s life. Because running a small business is such intense, 24/7 work, former owners often go from juggling multiple responsibilities to suddenly having so much free time. Moving on from a small business is a midlife transition that every former owner must learn how to navigate personally, professionally, and emotionally.
At Teamshares we help small business owners retire confidently by giving them the peace of mind that their business will never be sold again. This is done by converting the business to employee-owned, enabling it to remain embedded in the comunity for generations to come.
As small business owners become former owners, they are given access to an exclusive community of other owners who have sold to Teamshares, so they can connect with people going through similar experiences. The former owner program includes content, community, and individualized support for navigating this chapter, including the short and long-term impacts that accompany any major business transaction.
Helping former owners transition seamlessly into the next stage of their personal and professional lives benefits not only the owners but also their former employees and Teamshares’ vision of a network of 10,000 employee-owned small businesses.
As part of the former owner program, Teamshares partners with Modern Elder Academy (MEA), a school with various programs to support individuals through midlife transitions. We spoke with MEA experts Jeff Hamaoui, Co-founder and Chief Education Officer and Kari Henley, Online Director, to get advice for former owners experiencing a midlife transition after selling a small business.
In this post, we’ll look at how midlife transitions have changed over the years, discuss the different types of transitions that small business owners might experience, break down the anatomy of a midlife transition, and advise on how to navigate each phase.
What is a midlife transition
Whether a retiring high-level executive or an owner getting ready to sell a small business, a “midlife transition” is a period where things in life are shifting.
“Many people understandably struggle with the idea of a midlife transition, as well as the idea of aging,” explain Jeff and Kari.
“When the Social Security Act was passed in 1935, men were expected to live to an average age of 58 and women to age 62. Today, with an average life expectancy closer to 80 years old, middle-aged adults are incredibly active, engaged, and capable of tremendous impact.”
“So we have to put aside societal stigmas,” they continue, “and ask ourselves important questions like: What does life look like after? What will make life as deep and meaningful as it is long?”
It’s normal for the midlife transition period to be accompanied by feelings of depression, excitement, curiosity, frustration, a lack of purpose, and even grief. Jeff and Kari have defined these stages as the six P’s of midlife transitions.
The six P’s of a midlife transition
Jeff and Kari describe the different midlife transitions as personal, psychological, physical, passing, professional, or purposeful.
“Individuals often experience two or more transitions at a time, and even just one of these transitions can be a singular and overwhelming experience,” say Jeff and Kari.
“It can be helpful for individuals to identify and categorize their personal experiences to better understand their associated emotions.”
In many cases, the midlife transition experience includes multiple or even all of the six P’s:
- Personal transitions: moving, empty nesting, divorce, or a change in life’s pace
- Psychological transitions: feeling anxious or depressed, inflexible, lonely, or angry
- Physical transitions: changing hormones, diet, physical or cognitive health
- Pandemic/passing transitions: fear of death, facing mortality, uncertainty, or loss
- Professional transitions: retiring, changing career, losing job, or starting a new business
- Purposeful transitions: finding legacy, spiritual connection, or new direction
Are you a business owner who needs an exit plan to keep your company and employees in place?
Regenerative vs. regressive transitions
Midlife transitions can be experienced in two ways: regenerative or regressive.
“When facing a significant change that requires an internal transition, it’s common for fear to override the impulse to grow,” explain Jeff and Kari. “Not handling a transition well in the face of change is categorized as regressive.”
For example, when a business owner sells their company and feels lost and angry, despite their successes, because they no longer have the identity that comes with an office routine, daily business responsibilities, or the accolades of their profession.
“On the other hand, regenerative transitions are when someone learns how to let go and embraces the growth and change resulting in an experience that becomes truly transformational,” they explain.
In a regenerative transition, the individual sees an opportunity for freedom and embraces the exploration of what life can look like now that they’re not actively working. Often, the retired business owner finds meaningful ways to share their knowledge and expertise with others.
The anatomy of a midlife transition
To illustrate the anatomy of a midlife transition, Jeff and Kari reference San Francisco-based designer Damien Newman’s, “design squiggle.” The visual captures the idea that designing something new is always messy.
While midlife transitions can start out incredibly messy, they eventually transition to more linear experiences with value in each part.
Based on this framework, a midlife transition has three predictable parts:
- The end
- The messy middle
- New beginnings
Below, we explain each part and the typical milestones of a midlife transition.
Part 1: The end
Nearly all transitions in life begin with an ending, and nowhere is this more true than in midlife.
In the case of former owners, they are faced with selling a business they’ve poured their time and effort into, often for decades.
Whether self-initiated or not, an ending dramatically changes our habits, routines, and patterns.
“With big endings like a midlife transition, nothing is the same as it once was. Endings always represent a break from the past. And while they can be incredibly hard, dramatic, and awful, they don’t have to be,” Jeff and Kari explain.
The goal with a midlife transition, or any life transition, is to choose a “regenerative” ending. These require a great deal of skill and determination, but they can be far more transformative and vital to creating a new and positive in life than chaotic or “regressive” endings.
Every “ending” can be broken down into three important phases: external kick or internal shift, denial, and the emotional bath.
Phase 1: External kick or internal shift
Sometimes transitions are forced onto people and can feel like they came out of left field. This kind of situation is known as the external kick.
“External kicks are often far more difficult to deal with because they can feel like getting punched in the gut and leave us without a sense of personal agency,” say Jeff and Kari.
“On the other hand, an internal shift is a transition that comes from within and isn’t dictated by outside forces. It’s something one comes to terms with when they are no longer satisfied with the status quo,” they continue.
Sometimes, this is the gut feeling a business owner gets when they recognize it’s time to start a succession plan, prepare for retirement, and set themself up the next chapter in their professional life.
Phase 2: Denial
As Jeff and Kari explain, the desire to hold onto the comfort of familiarity and continue to execute things in the same way is a natural human reaction. When an individual claims that nothing is wrong despite a massive transition occurring, they’re operating from a place of denial.
It’s common, and understandable, for small business owners to fall into denial when they’ve spent their lives creating a successful business. For years, they’ve been responsible for the livelihood of employees, built relationships with customers and vendors, and acted as an important fixture in a community.
Denial for a small business owner can take many forms, including avoiding building an exit plan—even though 70% of businesses fail to sell when put on the market—or failing to effectively delegate tasks during a transition of ownership.
Many of us fear change and hold onto the comfort of the known, especially as we get older. This often results in denial.
Phase 3: The emotional bath
Midlife transitions bring up a lot of alarming emotions. Jeff and Kari describe the mix of hot and cold emotions former owners experience, with uncertainty, fear, loss, guilt, anger, and resentment colliding with intuition, confidence, determination, and excitement. This is known as the emotional bath.
“The emotional bath is normal in just about every midlife transition, and it can leave people with something of an identity crisis or a sense of not knowing who they are,” Jeff and Kari explain.
“This is often exacerbated by the fact that the emotional bath isn’t always experienced alone. Friends, family, and colleagues are often quick to provide their input on how they feel things should be,” they add.
While these external factors add to the challenge of a midlife transition, it’s important to keep in mind that the alarming emotions that come with becoming someone new and closing an important chapter are completely normal.
Part 2: The messy middle
The messy middle is that in-between time we often refer to as “liminal space.” For small business owners, this is often the moment when they’re retiring or giving up their business and there is nothing on the horizon to replace it.
For example, when a business transition has started but a business owner doesn’t know what they want to do after they sell. For many, the messy middle feels like an existential crisis.
Phase 1: In competence
The first phase of the messy middle starts with being stuck in one’s own competence, Jeff and Kari explain.
Small business owners who have been successful at building a business can find it difficult to embrace the midlife transition.
“Essentially, being so competent can become an obstacle because it makes it hard to let go of being good at who or what you once were,” says Jeff and Kari.
The discomfort of displacement leaves many small business owners who are facing a midlife transition feeling stuck or losing the confidence and motivation to move ahead. It can be difficult to fight the urge to return to what you know and embrace the evolution that comes with a healthy midlife transition.
Finding support and community through programs like Teamshares’ former owner program and MEA can help individuals identify the next meaningful stage of their personal and professional journey.
Phase 2: In the soup
“For those brave enough to keep going, the next phase is embracing the vulnerability of being someone, something, or somewhere new,” Jeff and Kari explain.“Nothing is yet defined or clear. The timeline is unknown.”
Business owners must learn to accept that things are changing. This is the deep work of the messy middle, referred to as being “in the soup.” Being in the soup is all about learning to embrace uncertainty, no matter how scary it might be.
Phase 3: Finding the thread
The last phase of the messy middle is finding the thread. According to Jeff and Kari, this is one of the most exciting phases because it’s all about merging someone’s skills and expertise with the new ideas, experiences, and people that help them transcend their old self.
“This is the phase where signs of a new path emerge and people start to understand what to look out for,” they explain.
This is the perfect time for former small business owners to get curious and understand how to apply the skills and mastery they acquired from so many years of building a small business to a new direction.
Part 3: New beginnings
New beginnings are exciting and fragile. New projects, new partnerships, and new lives reveal a world that’s full of possibilities. This is the stage where an individual feels energized, validated, and centered on their new path.
Phase 1: Becoming
The becoming phase is all about developing into someone new. It’s about finding a renewed sense of self and learning to answer difficult but important questions in a midlife transition like:
- Who am I?
- Who do I want to be?
- Where do I fit into my new future?
- What are my values and strengths, and how might I live them?
- Who else do I wish to go on this journey with?
Phase 2: Taking flight
Taking flight is where intention and action intersect and become next steps. As someone with experience building a small business, former owners are wise enough to know that new ventures don’t always work out as expected.
“The new career or venture may falter or not take off right away, and that’s okay,” say Jeff and Kari. “This phase is about recognizing that success in this next chapter is not about winning, but learning.”
The trick to staying positive is recognizing the wins, celebrating the milestones, and embracing a growth mindset.
Phase 3: Finding flow
Finally, finding flow is the phase of celebration. It’s where an individual has officially entered the next chapter of their life and their world is starting to feel centered again. They are with their people, connected to their community, leveraging their newfound mastery, and finally seeing the yields and benefits of their work.
Jeff and Kari suggest that this phase is when the midlife transition finally starts to make sense.
At Teamshares, we’re committed to helping small business owners retire confidently with peace of mind, so they can work through their midlife transition phase and focus their attention on what’s next.
Selling a business is an incredibly emotional process, and all retiring owners go through it. Teamshares offers prospective former owners a sense of confidence with our 90% close rate on signed LOIs, a business transition that will keep the business local and embedded in the community, and create a legacy of employee ownership. When they sell to Teamshares, small business owners have the support they need to focus on their midlife transition and launch an exciting next chapter.
If you’re a broker or business owner who needs an exit plan to keep your company and employees in place, submit your business to Teamshares.