Ask yourself this question: “Is dying at your desk the best that you can do with the rest of your life?”
If you answer “no”, then congratulations, you just started to break your version of Owner’s Block.
An estimated seven million baby-boomer business owners will exit their companies over the next 20 years. If you are a business advisor, your clients are included. If you are such an owner, and you don’t feel like thinking about it, or only have a vague idea of what you might do after you leave, then you are blocked.
Similar to what writers suffer, owners also get blocked, even though they realize that they
- are not living forever
- have much of their wealth tied up in the company (illiquid)
- may have key managers or younger family members anxious about their own future at the company
THERE ARE THREE EMOTIONAL FACTORS CREATING OWNER’S BLOCK:
- Loss of Identity: Owners often think of owning the business as who they are; when they leave the business, they lose connections and purpose.
- Fear of the Unknown: By not acknowledging their fear of the unknown, an owner without a personal plan will sabotage a transaction for no good reason.
- Equating Leaving with Dying: Some owners view leaving a business with a sort of death; they cannot envision a life without it. Sadly, if they don’t plan to leave, dying at their desk is where they inadvertently end up.
FINDING YOUR NEW OWNER:
When you are ready think about leaving your company, what you are really starting is the process of “finding your new owner”. Obviously, that means asking “Who is the right person to take over?” and “How can I ensure that they will be successful?” A qualified business advisor canhelp with finding the new owner and preparing the business for him/her, but that does not answer the bigger, personal question, “What will I become when I am no longer an owner?”
TIME IS YOUR ENEMY:
An owner may think:
- “It’s too early for me to think about leaving”
- “I don’t have the time to plan for leaving my business”
- “I have a great business, it will take no time to sell it when I am ready” (worst of all)
It may be a cliché, but it is the truth: failing to plan is equal to planning to fail. Recent research has shown that the first wave of boomers who have already sold their businesses, report that 75% were dissatisfied 6-12 months after the transaction, because they did not feel that they started planning soon enough, did not take the time to create more options, nor sought out enough advice from experts. In other words, they planned to fail.
There are four simultaneous paths that a business owner must follow in order to have a successful Transition:
- Personal Transition Planning
- Business Continuation Planning
- Business Transaction Planning
- Personal Financial Planning
An owner who neglects any of these will not have a satisfactory outcome. This article does not go into points 2-4, but professional advisors and consultants can help you when you are ready.
PERSONAL TRANSITION PLANNING IS A PROCESS, NOT AN EVENT
This is a process of becoming emotionally and psychologically prepared to leave a business. In this process, an owner creates new possibilities of his/her life with a trained advisor over a period of weeks, with regular follow up. An owner will deal with the “soft issues”, and recognize the “hard” issues he/she must address with business advisors and financial advisors. Done right, this is a collaborative, multi-disciplinary approach to help owners have a successful transition.
PERSONAL TRANSITION PLANNING CREATES THE CLARITY
An owner can develop personal and business objectives for leaving their company over the next 2-10 years. An owner who does not engage in personal transition planning can experience “owner’s indecision”, which will divert time and attention away from running the company, lead to loss in sales revenue, reduce profits, and decrease business value, all the while hindering the efforts of business intermediaries who are trying to help sell the company! Ouch.
Personal Transition Planning is objective, based on science and research, and coupled with one-to-one advising. Owners, who follow this path, will avoid the debilitating effects of “exit remorse” and “Post Transaction Stress Disorder”, which can cause an owner to experience depression, desperation, and pre-mature death.
NOT AN END, BUT A NEW BEGINNING
Rather than viewing leaving a company as an end, owners who use personal transition planning and follow the paths outlined above, will look ahead to the rest of their lives. In fact, they can’t wait to get started.
Article by Paul Cronin
December 8, 2010
Paul Cronin is a partner and Director Business Development for STPI, the Successful Transition Planning Institute, in Cambridge, MA. www.successfultransitionplanning.com. STPI has been offering programs for 20 years that help Business Owners, Executives and Professional Practitioners create new lives of Meaning and Purpose, or what we call, “The Platinum Years”. Paul may be reached at 978-749-9546.