(This is Part 2 in a post series by Transition Planning Expert Paul Cronin. Read Part 1 here.)
So, for all of you not planning, stuck on planning, or simply afraid of selling your business, here are the final 6 ways to leave your company unsuccessfully:
9. Working with conflicting advisors
This owner seeks the advice and support of professionals experienced in the transition process, but the different advisors give the owner different advice. The owner becomes confused and frustrated, and may stop the transition process. (The owner should assemble a team of transition advisors, who will work collaboratively to help the owner transition successfully.)
10. Inadequate value
Because owners didn’t plan adequately, didn’t improve the value of their companies or didn’t work with advisors experienced in the transition process, they didn’t get as much money for their companies as they could have.
E. Retiring Unsuccessfully
11. Exit-decision remorse
In this scenario, an owner makes a quick decision that they want to leave their company and they quickly transfer their company to new owners. They don’t take the time to look at all their options, and don’t have a clear idea of what they want to do with their life after leaving their company. After they have left, they begin to have second thoughts: “Did I make the correct decision? Maybe I should have stayed working longer. Maybe I should have tried to get more money for my company,” etc. Instead of enjoying their new life, they are obsessed by the thought that they may have made the wrong decision.
12. Retirement remorse
Owners may successfully transfer their companies to new ownership, but if they didn’t have a plan for a fulfilling new future, they don’t know what to do now with all their free time. They can become bored, even depressed, and miss their old lives as owners. At least then they had something interesting and meaningful to do. They think, “I shouldn’t have left. I don’t know what to do with my life now.”
13. Retirement rut
In this scenario, owners have successfully left their companies but didn’t plan what to do with their new lives. Because as owners they were busy all the time, they now find ways to become constantly busy, but these new activities don’t give them a sense of meaning or purpose. They have dug themselves into a hole of meaningless activity and feel unsatisfied and depressed, but don’t know how to make their lives more meaningful.
14. Post-Transaction Stress Disorder (PTSD)
In Post-Transaction Stress Disorder, owners successfully left their companies, and even had a plan for what to do with their new lives. But their plan was very limited and one-dimensional – for example, “I’ll play golf,” or “I’ll spend time with my grandkids.” They soon realize that their one plan is not working out as they imagined, and this one activity isn’t enough to bring them new meaning and purpose. They become bored and depressed. What they need is a more multi-sided, comprehensive and well thought-out plan for their new lives.
15. Financial deficit
Financial deficit occurs when owners leave their companies and discover too late that they don’t have enough money to live fulfilling, successful new lives. Financial deficit can occur for several reasons, including lack of planning, getting inadequate value for the business, or making a wrong choice in new owners who were supposed to provide the former owner with future income, but who couldn’t run the business well so it failed.
Bottom line: you WILL leave someday; you can plan for it on your terms, or let others plan it for you. There is no third option.
Leaving your company successfully means that:
- You have a plan now, for the new life you want to live.
- You leave your company so that:
- You come away with the money you need for your new life.
- Your company continues successfully after you have left.
- You are able to live the new life you have designed.
To accomplish the above means that you must:
- commit to leaving at a future date
- build a collaborative team of advisors to help you
- execute your plans, despite the occasional set backs
This is a simple formula that really works. It requires a lot of work over many months and often years. The good news is that it isn’t rocket science, and no matter the size of your company, you can create some type of plan using this formula.
This is, after all, your life, and you don’t get to audition for it.
This article was adapted from our acclaimed book, Finding Your New Owner: For Your Business, For Your Life, by Jack Beauregard (my business partner). Jack is author, founder and CEO of Successful Transition Planning Institute in Cambridge, MA.