“An object at rest tends to stay at rest” Inertia is a powerful force. A lack of preparation and value enhancement for the sale of your business means your proceeds for retirement won’t be maximized.
A recent study by PWC showed that 75% of business owners regretted selling their business 12 months after closing. Why? Because they had NOT prepared for what retirement life after business would be like, AKA “inadequate personal planning preparation” like financial planning or consideration for how they will feel. or the softer issues.
The Key to Post-Sale Satisfaction
- The key is to develop a plan. As Peter Drucker says “There is one prerequisite to managing the second half of your life is, you must begin working on it long before you enter it”. Sure, finances are important but the softer personal issues are generally what causes the problems.
- You had better consider both your and your spouse’s health, age, physical condition, fitness and mental agility.
- You will need to think out all your family responsibilities. Both parents and non-actualizing dependent children are creating pressure for the sandwich generation. Also, consider the timing of your partner’s plan as misalignment can cause issues.
- Think carefully about personal identity issues.“If what you have done for the last 20 or 30 years is your identity --- then who are you when you don’t do it anymore?” We call this “role fusion” and it’s a big one that ends up wrecking many a transaction near the finish line. … “ Who am I outside of my business” not knowing who they are beyond the business.
- Beware: marital status is right up there too! Statistics prove that departing owners in a solid relationship do much better post-transition. The increased frequency of Grey Divorce is scary.
- Voluntary vs. Involuntary Transition: No surprise here, that owners who planned their transition did much better vs. the group that had an exit forced on them, i.e. health changes, marketplace or economic turns, etc.
- What will you do to create meaning in your life after you sell? Consider Physical – Health – Intellectual – Stimulation – Recreational Activities – Partner Activities – Family Engagement – Residence – Spiritual and Faith – Philanthropy: all serious considerations just to name a few.
- The granddaddy of them all is social connections. Plan to stay connected. This can be a real deal wrecker. Think about all the connections, relationships and friends you have made in business. Question: Who will you be hanging out with when you are not in business? You better have a plan. This one usually causes the most problem.
- Emotional Decisions: In the Spring of this year, we did several public seminars. Through a show of hands, the audience was asked how many worked 40, 50 or 60 hours per week. It was shocking to see over half of the hands still up at 60 hours per week! Look, we understand this is your “Baby” and that you have poured your heart and soul into building the business. Yes, It is the emotional decisions are tougher and usually take longer.
Relax. We’ve been doing this for a while and you will not be the first owner to have one or many of these issues. Luckily, we have many tools to help you. We have bought, acquired, licensed, or have the rights to dozens of tools that will help and guide you:
- “What’s Next” Self-Assessment
- “Retirement Satisfaction Predictor” Online tells you if you are ready
- Licensing for retirement
- “Plan for Transition” guide and tutorials
- Training in “The Platinum Years”
- Mentorship with the “Strategic with the “Strategic Transition Institute”
Take comfort in knowing there is help, “Transitioning a Business is like Retirement Planning. You don’t start it the day before you retire.”Business owners need help in planning their transition. Too much is at stake; planning early avoids risk and allows owners to maximize their return on the sale of their company and happily enter a new phase of life. “Transitioning a Business is like Retirement Planning. You don’t start it the day before you retire.”
Who is John Robinson?
John Robinson is President & CEO of Strategic Succession, an independent advisory firm that has been helping business owners build value in their companies to optimize sale or succession outcomes for 35 years. He is a Certified Financial Planner (CFP), Elder Planning Counsellor (EPC) and Certified Exit Planning Advisor (CEPA) designation from the Chicago-based Exit Planning Institute.
John is also the founder of the Trusted Advisor™ Network, which provides complementary advisory services for business owners. In collaboration with partners in the Trusted Advisor™ Network. John creates business succession strategies. Proper planning and value enhancement take a collaboration of specialists to maximize results. He helps clients align personal and business goals, such as preparing their businesses for transition to new ownership, estate planning, risk management and actively preparing for multiple contingencies to maximize value.
John can be reached at 604.874.4429 or by email at email@example.com