What will you put on your business card after you exit your business?

It’s scary to think about not doing what you’ve done all your life. It’s even scarier to not have a clue as to what your identity will be once you’ve exited out of your business. We all want to avoid the inevitable, but unfortunately, procrastination doesn’t make it go away. It only causes the outcome to be not as good as it could be.

So how do you start down the path of overcoming these emotional obstacles that prevent you from tackling this absolutely essential business process of exiting your business? Here are four key questions that must be considered as part of your exit planning process. 

1. How will you structure your time?

2. How will other people react to you?

3. What are your assumptions and beliefs?

4. What will your role be?

The first question is how you will structure your time. One of the key functions of work is that it introduces structure and routine into our daily lives. Even if your have a varied schedule, chances are you still follow a schedule of some sort. Now imagine, not going to work. Imagine not having standing appointments. 

Some people are reluctant to even think about exit planning because they can’t conceive of a life without a full work schedule. They’re convinced that that life will feel aimless and unsettling. This is a clear obstacle for many to engage in exit planning, but this shouldn’t stop you. 

Think about your first home you purchased. Chances are twelve to eighteen months in advance of the purchase, you probably had no idea which specific house you would buy. You might have had some idea on neighborhoods you liked and possibly the style home, but the lack of specifics didn’t stop you from planning for that major life transition. The same holds true with exit planning. Just because you don’t know how every day will be filled doesn’t mean that you shouldn’t plan for a time when you’re no longer in the business.

How will you spend your days? Will you need to have a new routine in place immediately, or will you be comfortable allowing one to emerge gradually? Either way, you should identify in advance a few practical and rewarding activities that you can introduce into your daily or weekly routine. Think about “where” you like to spend your time. Will you feel comfortable operating out of your home or will you find it more appealing to be in an office setting – even if it’s only part time? If you’re truly at a loss about how to occupy your time, try to identify the most critical, essential ways in which work is a source of satisfaction for you.

Second, once you’ve exited the business, how will people react to you? For most, work contributes to their sense of identity. Not only does it influence your self-view, but also shapes how others view you. How will you respond if someone asks, “what do you do for a living?” If you reply, “I’m retired” or “I sold my business”, it’s almost a sure bet that the person will inquire, “what did you do before?” Does this question imply that whatever you do after exiting work is of little interest or value? More importantly, will you infer it does?

If you’re concerned that people will treat you differently or with less respect once you’re not working, pause and consider what sort of reaction you would “like” to receive. If you want people to show interest in you for who are, not just for the business person you once were, then you must give them enough information to pique their interest. Instead of responding as above, if you’re asked, “what kind of work do you do?” you have the choice of responding simply, “I sold my business two years ago” versus saying “I sold my business two years ago and I’m busy crafting the next chapter of my life.” Which would you prefer? 

Third, what are your assumptions and beliefs? Certain assumptions can impede exit planning – even if those assumptions aren’t warranted. Remember, it’s human nature to pay attention to and believe information that supports our views, while ignoring or discounting information to the contrary. A very common assumption held by many business owners is that they don’t need to learn about exit planning. They believe that running a profitable company is the only thing that matters. The reality is that they might know a lot about their business, but they know very little about exit planning. Just because your business is a success doesn’t automatically mean that you will exit from it successfully. 

Fourth, what will your role be once you exit your business? As a business owner you wear many hats, occupy many roles, and are viewed by others accordingly. How will it feel to relinquish some if not all of those roles, and what new roles might you take on? How might your role change within your family? Will you be spending more time at home? How do you imagine other family members might react to your new status? How might your role change within your company? Nobody wants to be forgotten about, but keep in mind that regardless of your legacy, your departure will create an opportunity for others at your company to step up, make their own contributions, and achieve their own goals.

All of this can be overwhelming but engaging a professional exit planning advisor can help you through the process to achieving a successful exit. Remember, you only exit your business once. Don’t you want to prepare for it to be as successful as possible?

“You wouldn’t get in a car and drive around aimlessly, hoping to eventually arrive at a pleasant destination. So why would you even consider doing this for your business?” 

—Koos Kruger,  Business Exit Companion: An Owner's Guide to Exit Planning and Unlocking Value

Gard, Larry, and Peter Christman. “What will you put on your business card after you've exited your business?” 2013.  

Jayne McQuillan, CPA, MBA, CEPA is a strategic management consultant, and the owner of Journey Consulting, LLC, in Green Bay