What Are You Stepping Into With Your Business Exit?
Considering a business exit? If so, it’s important to put the potential exit, and the consequences of that exit, into perspective as well as giving careful consideration to all your options and future needs prior to selling or transferring the business.
The emotional impacts of exiting a business can be disastrous for an owner who did not carefully consider his or her options and future needs, prior to selling or transferring the business. In the absence of this self reflective thought, a successful exit for the departing owner becomes significantly more challenging, with a greater chance of either financial or emotional dissatisfaction. In order for a business exit to truly be successful, you must be aware of what you will be stepping into with your exit, and be satisfied with that life you realistically expect to live after the business.
It is important for you to put your potential exit, and the consequences of that exit, into perspective. You have likely invested most of your time in that business over many years, and the next stage in life following an exit can be just as, if not more, successful and fulfilling. In order to achieve this ultimate goal, however, you must devote significant time to considering exactly what you plan to do following the exit - and what will be needed in order to realize those plans. This is a critical component to the exit planning process, as being able to envision what you want to do next in life is necessary to begin to visualize the future without the day-to-day running of the businesses. In the absence of this type of thought and analysis, a business owner is often sub-consciously relegated to his current comfort zone of running the business, and will be lost once it is gone.
The most effective way for advisors and family members to assist business owners through the exit process is to encourage reflections on life after “the business,” and for you in turn to begin envisioning specific activities that you'll engage in during the time currently occupied with running the business. Full days stretched into others can become a seeming eternity for a business owner used to working 40-plus hour weeks. It simply is not in the makeup of most entrepreneurs to spend their retirement in idle.
Many exiting owners will take up hobbies, plan to spend more time with their families, begin mentoring or start another, less time-consuming company. This is an opportunity for the business owner to create a new life style, to enhance his or her life beyond the current restrictions on time inherent to owning a business. It is an opportunity for an owner to get creative about trying out new activities they would really enjoy doing.
When you can envision yourself outside of the business, the planning process quickens with you no longer considering the exit as leaving something, but rather as starting something new. A business exit should not be viewed as only signaling the end of an era, but more importantly, as heralding the start of another. If it is planned for properly and you embrace the newfound freedoms inherent to exiting a business, the period following that exit can be the most emotionally fulfilling in your life, and of your family.
Without individual self-reflection on what you truly are stepping into with your exit, and what can and will await you there, it is unlikely for you to achieve a successful business exit that truly meets all of your goals.
© John M. Leonetti
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ABOUT THE AUTHOR
Specializing in Business Exit Strategies, John M. Leonetti, Esq., M.S. Finance, CM&AA founded Pinnacle Equity Solutions to provide exit strategy planning services to business owners as well as education and training programs for professionsal advisors. To learn more about John's Exit Strategy Services and his recently published book, "Exiting Your Business, Protecting Your Wealth", visit www.ExitingYourBusiness.com