Life After an Exit: How do Entrepreneurs Transition to the Next Stage? (2 of a 4 Part Series)
In the first part of this 4 part series, we talked about preparing to sell and actually selling your business. Because this process is usually done once in your lifetime, it creates a lot of anxiety and uncertainty, as you have no past experiences to pull from when you're going through it.
One way to look at this process is to compare it to selling your home and moving. Many of us have moved at least once in our lives, and many of us have moved several times. When preparing to move, we prepare our home for sale, but we also look at where we're going to move to next. We leave behind memories and friends, only to look forward to the new place we are going to experience. We look forward to the new neighborhood and the new people we will meet. The changes are scary, but the excitement for the future is what allows us to change and move forward.
Once you've sold your business, one of the most consistent themes is the mourning you will go through as you feel the loss of community and identity. You feel the need to find structure and meaningful things to do with your time. When you were the owner of your business, you knew that when you got up in the morning you would head into the office, you knew the people you would be interacting with during the day, and you had a purpose of leading, coaching, and problem solving each and every day. Now, you have a huge whole to fill.
One of the biggest mistakes that sellers make within the first year after the sale is trying to immediately fill that void. They try to fill it with exotic travel, renovating or buying homes, and other activities that leave them disappointed and unfulfilled. Or, they jump at all possible opportunities trying to fill the void, and then end up weeding out many of the unfulfilling activities.
Probably the most difficult thing to do, yet the best thing for you to do, is to do little in that first year except take care of time-sensitive issues such as tax and estate planning for the new wealth that has been created. This time gives you and your family time for adjustment. Time is needed for thoughtful decisions on how the wealth can be used to move you and your family forward. A wealth creation event is disorienting for all family members, as everyone's identity has changed. Many entrepreneurs find that they have deeper relationships with true friends and most family members after this wealth creation event. Whereas, others find themselves in divorce and family turmoil if values are not shared.
A key theme for success is to go slow with any changes after a wealth creation event. Ask yourself, "What do I truly want to accomplish?" Here are some key questions to help you in this process.
What is the right path for my next step or steps?
How am I going to find that?
How am I going to replace purpose, community, structure for my time?
What will make me happy now?
What is there left to achieve?
What books, models for reinvention, coaching, and seminars could help me?
How can my money move my life towards my goals?
How should I manage my money?
The sale of a business is an exciting time, as it is the reward for the blood, sweat, and tears you put into the business, yet it is the end of the chapter for which a new chapter needs to be defined. Life will never be the same as you say goodbye to the "family", friends, and familiarity of what was. However, being able to actively say hello to what is ahead as you create new dreams, new adventures, new friends, is what life is all about. You're very fortunate to have achieved the American dream, now continue to dream that next new adventure for you and your family.
Lange Entrepreneurship Center, Eugene . "White Paper 03. Life After an Exit: How Entrepreneurs Transition to the Next Stage." Credit Suisse 1 (2013): 32. Print.
Jayne McQuillan, CPA, MBA, CEPA is a strategic management consultant, and the owner of Journey Consulting, LLC, in Green Bay