The problem with retiring is that almost everyone that I know, that has retired, hates it! Ok, maybe not everyone, but most of the business owners who have retired can’t stand it. I hear a lot of, “There’s only so much golf I can play!” or “I’m bored out of my head!”
However, the issue can go much deeper. Many business owners will retire by selling their business. I have worked with many business owners in my business coaching practice who have deeply regretted selling their business. The one major goal in their lives, when achieved will many times turn into a nightmare for them. According to the State of Owner Readiness report from The Exit Planning Institute, a full 75% regret selling their business one year later. Honestly, I wasn’t surprised. I would have guessed that the percentage would have even been higher. I emphasize to all my business coaching clients the importance of creating an exit plan. And this is not a subject that I push only for business owners who are contemplating retirement. I want them to start thinking about an exit plan early, from day 1. I want the Exit plan to be part of their business plan. I believe it’s that important.
The reason is simple. A business owner should always have a goal of selling their business, even if they never intend on selling it, they should always have an idea as to what the perfect conditions for selling would be if presented the opportunity. I can’t tell you how many business owners that I’ve worked with were frustrated with the terms of the sale or the amount that they settled for. Money was always left on the table and there were always frustrations with the final process.
The Exit Planning Institute says that there are four drivers of a satisfying exit:
- A Personal Vision: The owner has a vision for the future, after they sell the company. In other words, the owner has a vision for himself and his family of what happens next for them. They have a plan and are excited to move on to the next thing. Frustration with retirement usually comes when the owner has no idea what’s next.
- Deal Flexibility: The owner is sometimes in the dark about what kind of deals can be made in the selling of their business. If they have an appropriate exit plan, then they can understand the options and be flexible and open to ideas on how a deal might be structured. Being flexible also creates an environment where the buyer wants to work with the owner to create a win-win deal.
- Personal Detachment: Many times, a business owner without an exit plan will allow their ego to get in the way of a great deal. Sometimes an owner can just be too close to it, too emotional about letting go of “their baby”. They begin to feel a sense of loss, and they let it get in the way of creating an agreeable deal. An owner with a plan will always understand that he is happy with his plan and thus will be happy with the outcome. With this knowledge they build a certain personal detachment, drop the emotions and ego and allow the deal to happen
- Taking Care of the Team: Often the retired owner will regret the sale of his business out of worry for the team they left behind. They have concerns of how the team would be treated and worrying that it would have all been better if he had not sold. This is something that a great exit plan can easily address. Think about it early and plan for this to be addressed as part of any deal
The idea is simple. Sell your business and retire happy. The best way to do this is begin now working on an exit plan for you and your business no matter when or if it happens. No concerns or regrets. There should be a remarkable life to live upon retirement. Plan for it now!