For some business owners who begin their exit journey, the “why” of selling is not deeply considered often enough. But the “why” question is in some ways the most important you can answer, because if you are not crystal clear on your goals post-transaction, odds are good that the process of exiting will wear you out.
Because the exit journey can be very challenging especially if you don't have a professional M&A firm by your side AND if you are not thoroughly committed to the process, with a clear vision of why you are doing it and where you want to be afterwards. If so, odds are good you will join the throngs of business owners that bail out at the 11th hour when the path becomes really difficult (aka, due diligence) and they are not fully committed to the "why" of exiting.
That is why many of our dealmakers consider themselves to be life coaches, if not full-time therapists, to our clients.
Now the reality is every business owner at some level will admit that he/she is not immortal and eventually the business will need to transition to new owners. And most realize that a planned orderly exit is FAR better than one caused by external forces that you have little (or no) control over.
The problem is two-fold:
The first dilemma is easy to fix: Hire a professional, experienced M&A firm like Generational to guide you. Although success is not guaranteed (see problem number two above) the odds go up dramatically if you have a team of pros collaborating with you, guiding you, counseling you and supporting you through the journey.
The answer to the second issue listed above is plainly up to you. We have found that our clients who can clearly answer the question – “So, what are you going to do with the rest of your life after exit?” – are in a far better position to not give up when the hard times of due diligence rears its ugly head.
When we first meet with our clients, that is in fact one of the first questions we ask. If the answer is a blank stare or some mumbled generalities, we know we must go back to square one and really help the client discover what life could look like after the deal closes.
What you want to do is up to you, your family, your passions, and your desires (and ultimately how much capital you need from the deal to do any of them). We highly recommend that our clients meet early on with family members, friends, trusted counselors – folks that know you well enough to tell you that backpacking in Tibet is may not the best option for you post-sale (although for some it might be – nothing against backpacking and/or Tibet).
But I raise a key point in the paragraph above and this is vitally related to the WHY you want to sell – How much future income will you need from the sale to fund the next chapter in your life? This is why Generational is so fortunate to have a Wealth Management team that can get involved with our clients early in the process. Because how much you WANT to have post-close may not be what you NEED to have to fund your next phase.
But if you haven’t decided or articulated what you want to do post-sale, then how much capital will you really need?
The good news, as I mentioned at the beginning of this missive, is that our dealmakers are skilled in helping you figure this all out. Many of our clients become life-long friends with their dealmakers sharing their lives post-sale that they are so thankful to have. Here are just a few of our clients on life after the deal closes:
Having had the honor and privilege of meeting with each of these business owners to do these interviews, I can tell you that each one is pursuing a completely different life post-sale than the others. Although none are backpacking in Tibet, they are enjoying their lives because they knew what they wanted to do after the close and planned for it accordingly.
You can too!
We know from helping hundreds of business owners discover their future, that exiting a business is never easy. To leave the organization, team, clients, and myriad of other relationships and face the unknown is tough. There is an old saying, “the fear that I know is not as bad as the fear I don’t know,” meaning that even though you may want to move on, the fear of the unknown can keep you locked up.
To learn more about our counseling services (just kidding) and the proven Generational process, please set aside some time to meet with us at one of our Executive Growth and Exit Planning conferences. These are complimentary and we hold them throughout the U.S. and Canada. You can find one near you here.
Most importantly discover your life goals and your desires post-sale as you navigate the process, so in the end you don’t end up asking your spouse, best friend, or Cousin Larry: What the heck am I going to do now?
Carl Doerksen is the Director of Corporate Development at Generational Equity.
© 2022 Generational Equity, LLC All Rights Reserved
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