If work is where you discover your passion, you are not alone. Nearly a third of Americans say that their careers are what gives their lives meaning. Whether you’re a nurse, an entrepreneur, or a young executive, your work can provide you with a sense of mastery over a key domain of your life – and provide you with an opportunity to share your considerable knowledge, expertise, and experience with others.
Broadly, attempts to build a professional legacy can be grouped into two buckets: those most workers endeavor to achieve during their careers and those that are specific to entrepreneurs who want to leave a viable small business behind when they enter retirement. If you want to make a lasting impression on your organization, industry, and community, we have some ideas to help you turn your career into a legacy.
Mid-Career Options For Legacy Creation
A legacy cements your work in a way that benefits your colleagues, industry, and future generations of professionals. It hinges on a drive to create something larger than yourself and recognize that there’s a purpose to it all. In this way, thinking about your own professional legacy can help not only others, but yourself. You will be more engaged with the work you do each day if you appreciate that it has meaning. Here are some common ways to start building a legacy as you progress through your career:
- Become a Mentor: Professional mentoring relationships increase knowledge transfer, promote upskilling, and improve employee retention. Becoming a mentor can ensure that not only your expertise and skills get passed along to a new generation of workers, but reinforce soft attributes such as work-ethic and empathy. Not sure if there’s a good fit for a mentee in your current organization? Consider becoming a mentor for a local chamber group.
- Take More Risks: Not taking enough career risks was one of the top regrets cited in the book “30 Lessons for Living”. Leaving a lasting legacy might mean doing more with what you have. This could mean accepting a challenging international assignment or making a lateral move into a related role. Ready for a big leap? Consider starting your own business. Perhaps that means taking on consulting work on the side until you feel you are situated to strike out on your own. Fortune often favors the bold.
- Publish Your Insights: Professionals often don’t realize just how much wisdom they have accumulated over decades of education and time in the workforce. Whether it’s technical knowledge or general leadership skills, consider documenting what you know. While the best-selling business books often speak broadly about general business interests, thought leaders in a given field often have a ready niche market waiting to hear their more specific insights.
How To Effectively Transition Your Small Business
For entrepreneurs with closely-held or family-owned businesses, transition and succession planning should be started years before retirement. This ensures that your legacy is secure and you can earn maximum value from all of your business-building efforts. It also means you can spend your retirement thinking about your lasting legacy, not if your business will be able to have the success it achieved with you at the helm. But while 68% of entrepreneurs plan to keep their businesses within the family, only 26% have begun to plan for that day. Here are some steps to consider in the process:
- Maximize and Protect Business Value: If planning for an eventual external sale, you need to ensure solid management is in place to maximize value. If preparing for a family or internal transfer you need to impart knowledge while also documenting key processes. Finally, regardless of your exit strategy you need to put protections in place to mitigate against potential loss, including key-person insurance, life insurance, and various liability coverages. Our recent blog on common small business mistakes covered this topic in more detail.
- Plan To Transfer Ownership AND Management: Entrepreneurs often focus on the dollars and cents along with the legal elements of ownership transfer, but you should also be planning to transfer key management functions. This means that you need to identify (early) the skills and expertise that will be needed from successors, formulating your exit timeline, and helping to prepare internally (including family members) for their new roles.
- Incorporate The Transition Into Estate Planning: Small business owners need to include the transition of their business into their estate plan. Most simply, absent an estate plan, state law might dictate what would happen with your business. Tax considerations are also a key element of transition and estate planning. You will want to review your options with a tax expert early so that you can make changes in the year(s) before the sale. For example, you might give shares to family members or institute an employee stock ownership plan (ESOP) to reduce taxes.
Your work matters — for many, it ranks along with family and friends as a cornerstone of their adult lives. That means that you should make the most of the time you have in the workforce and prepare for your professional legacy to endure once you have left it. Becoming a mentor, taking more risks, and publishing your insights are three mid-career ways you can make an impact outside the normal 9-to-5 (or 7-to-7).
If you’re a small business owner, protecting and maximizing your business value and preparing to transfer it can lay the foundation for a lasting legacy in which you can feel proud during your retirement. And effective wealth and estate planning should include the impact of your business transition and timing on your personal financial goals.
At Magellan, we believe it’s our job to match your vision with a plan to pursue it. Together, we will create diversified potential income sources, a dynamic spending strategy, a cash cushion, and a written retirement strategy. That strategy will include ways to ensure that your chosen profession is carried out via a legacy, as appropriate.
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Wells Fargo Advisors Financial Network and its affiliates do not provide legal or tax advice. Transactions requiring tax consideration should be reviewed carefully with your accountant or tax advisor. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.
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