Exiting your business...it's not about the check
Updated: Jul 14, 2020
As I enjoy a rainy day of sitting in my sun-room at our cabin during these strange times of COVID, juggling multiple client demands, most of which are related to transitions, I can’t help but think about how what has been built over a career is culminated in a mere sales transaction.
Now I don’t want to minimize the complexity of transactions, the work put into due diligence, negotiations, etc. to get to that point, but at the end of the day, a check exchanges hands and the business that you’ve built is no longer yours. Are you ready for that?
As I work with business owners that are contemplating the transitions of their business, some of the key considerations that they need to struggle through have nothing to do with the check they receive upon sale, but rather the emotional struggles to get to the decision to sell, and then the planning and execution of their plan, or “life after” the sale of their business.
As our children get older and my husband and I begin to do more traveling, as well as spend time with just the two of us, we are invigorated by all of the new adventures we can go on and things we can do. This new phase is like starting a whole new life - not one of sedentary retirement, but of new opportunities, new adventures, new learnings, and renewed freedom.
Sometimes I think we lose sight of the ability we, as Americans, have to live the “American Dream.”
Thomas Wolfe said, "…to every man, regardless of his birth, his shining, golden opportunity ….the right to live, to work, to be himself, and to become whatever thing his manhood and his vision can combine to make him."
The key to this statement is not that the American Dream ends upon retirement, but rather it is that we need to live and “attain to the fullest stature of which they are innately capable.” With women living an average of 81 years and men 76 years (Copeland, 2014) planning for life beyond our careers and our businesses, is critical to not only a long life, but a happy life. In the book, How to Retire Happy Wild and Free, author Ernie Zelinski states, “Retirement does not have to mean the end of life-in fact it can mean a whole new beginning to the life you never had time to explore.”
I think too often we see retirement as the culmination of our success, of reaching the pinnacle of where we are to go in life, as opposed to an opportunity to become so much more. However, in order to get to that point, we need to plan out our course of not only what is the right transition decision for our business, but what is the right transition plan for us as we start a new beginning.
I know that the business owners I’ve met with feel that they are not done when they exit their business, but I can also say that many haven’t thought out their plan beyond the first 6 months.
As you plan for your exit, don’t just focus on the business transition, but make sure that you are focused on your personal path as well.
Some things to consider:
What does the next phase of life look like? Is it a new business venture, volunteering/mentoring, travel, etc.?
Has your family been engaged in the process? Will your spouse retire at the same time? Have you talked about what this looks like for the both of you?
Based on what you want to do in your next phase, do you have the financial means to support those aspirations?
What will be your identity after exit? What will cause you to get up in the morning?
Remember, it’s never too soon to begin planning for your exit. Healthy discussion and engagement in this process will not only provide a clear direction for you, but provide security and comfort for those that you’ve worked so hard to provide for.
Copeland, Larry. "Life Expectancy in the USA Hits a Record High." USA Today 19 Oct. 2014. Print.
Jayne McQuillan, CPA, MBA, CEPA is a strategic management consultant, and the owner of Journey Consulting, LLC, in Green Bay