Owners Should Think About The Reason To Exit As Part Of Business Exit Planning
The mechanics of Business Exit Planning have been extensively described in print and on the web. Helping business owners actually commit to Exit Planning, it seems to me, takes more than just mechanics.
One of the seminal books sparking professional interest in the Business Exit Planning was The $10 Trillion Opportunity: Designing Successful Exit Strategies for Middle Market Business Owners, by Richard Jackim, an experienced investment banker and former Wall Street attorney. Mr Jackim’s book keyed off the notion that when Baby Boomer business owners decide to sell their business, there will be a glut of businesses for sale with a variety of implications. Interestingly, $10 Trillion was written in collaboration with Peter Christman, Co-Founder and Chairman of the Exit Planning Institute as well as the Founder and CEO of the Christman Group -Value Enhancement Inc. Dubbed “The Original Exit Planning Coach,” Mr. Christman was an early innovator in the field, developing proprietary processes, plans and programs that remain industry models.
Another seminal work was The E-Myth : Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber who cut his teeth coaching entrepreneurs all over the country and now, through his “Dream Room” project, he’s coaching internationally. If you’ve ever heard the phrase “Working ON your business rather that working IN your business”, you have Mr. Gerber to thank for it.
Another important thinker in this field is John Warrillow, the author of Built To Sell: Creating a Business That Can Thrive Without You and the founder and CEO of The Sellability Score, a self-assessment questionnaire that lets business owners evaluate the “sellability” of their business.
Over time, the market has developed firms offering Exit Planning certification taken up largely by CPA, financial planning, and insurance professionals. Examples of certifications offered include The Exit Planning Institute (Peter Christman’s organization), Pinnacle Equity Solutions‘ “Certified Business Exit Consultant”, Business Enterprise Institute‘s “BEI Certified Exit Planner”, and others.
The focus of most of this thinking is largely mechanical: preparing the business for sale; achieving maximum value; managing financial risk; managing business continuity risk; retaining key employees; and managing financial health of the business seller after the deal. These import aspects of exit planning suggest the assembly of a team of professionals with skills and products that address such issues. Having been a business broker for over a decade, I can certainly contribute to and help to build the team to take you through the mechanical, but…
There is an important question that remains unanswered by the mechanical approach to Business Exit Planning, i.e. why is it so few business owners are actually planning for the inevitable? A common statistic quoted by Peter Christman is that “75% of owner profoundly regretted selling within one of year of doing it.” He goes on to say that as much as “80% of businesses are not salable.” My research agrees with this statistic. Following the math, this means one in 20 business owners will exit their businesses and find fulfillment afterwards. All businesses will either sell or they will close the doors. Since those are the only choices, it should be easy for the business owner to see the better option. However, the demands of running a business and the thrill of “the game” often prevent a business owner from reflecting on what they will be doing after they exit their business. What will be the new vision? What will rekindle a passion for what they do? Is it possible that creating a vision of a business owner’s “encore” is the necessary condition for creating a meaningful and successful business exit?
This leads us to “The Why.”
Some thoughts from Steve Jobs1 and the questions they might inspire concerning “The Why”:
“I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn’t interest me, and begin dropping in on the ones that looked interesting.”
Are you doing what you love or just sitting in the “required classes?” Would exiting your business feel like “dropping out?”
“you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”
Have you thought about the life events and choices you made that have lead you to this place at this time? Can you see the dots? Can you connect them?
“I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.”
How heavy is your success? Do you believe all human beings are, at their core, creative? Is your creativity unleashed?
“You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.”
Are you settling?
“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
If you are interested in reading what many consider to be the definitive biography about Steve Jobs, get Walter Isaacson’s Steve Jobs.
How do you want to be remembered? RU Ready Now? Want to talk about this? Can I buy you a cup of coffee?
1 From Commencement address at Stanford delivered by Steve Jobs on June 12, 2005