It’s a simple question but it is not always easy for an entrepreneur to answer when selling their business.
You invest so much of yourself into your business that it can be hard to distinguish where “work” ends and “life” begins. But selling your company may require you to cleave one from the other. Will you survive when you do?
Anxiety, depression and even death have been known to follow when a business owner does not properly plan for life after their business. Filling the void with productive and purposeful work and activities is vital in transitioning into retirement.
When a hobby like golf, tennis or fishing becomes the norm rather than the exception, even the most avid enthusiast will grow bored without another challenge to overcome or cause to support.
Therefore, failing to properly plan for their new found time is often among an owner’s biggest regrets after selling their company.
Here are some ways to avoid this all too-common scenario as well as other mistakes.
1) Pursue purpose. Finding fulfillment outside of the office is paramount in surviving the sale of your company, especially for baby boomer business owners who are retiring. Prioritize your values and prepare accordingly. If you want to spend much of your time volunteering, for example, line up your charities now.
2) Plan your priorities. Want to spend more time with family members after you retire? Start scheduling weekends with them so that you will not be a stranger who suddenly interrupts the lives they have grown accustomed to living without you.
3) Pick your purchaser carefully. Prudence pays when selling your business. Do not let the company that you may have spent a lifetime building disappear within a few short years—or even months. Ensure that the next owner shares your vision. For example, not only will a strategic buyer usually pay more, they also will likely be more committed to retaining your team and perhaps steering the course that you had set.
4) Compare cultures. This is particularly important for technology companies or other innovative businesses. What seems good on paper does not always work in practice, so get a true feel for your buyer’s culture and make sure they buy into yours. This will prolong the honeymoon after the wedding.
5) Get your due. Don’t wait until you have to sell the company to do so. Calculate your wealth gap and close it early. That is, do a detailed calculation of how much you need to sustain your lifestyle in retirement, determine how much you will have to sell your business for to fund it, get a formal valuation of your company and implement a plan to build value and secure a buyer between now and your planned retirement.
6) Anticipate anarchy. Account for all of your stakeholders—including investors, family and key employees. Your plans for the business may not jibe with theirs. Arrive at a consensus or get their acquiescence. Their support is crucial in achieving your goals for the sale, and perhaps your plans for after.
7) Become an order-taker. You’ve grown accustomed to being the boss. But now you are not. Your new boss will be telling you what to do. Or, your spouse, if you are suddenly wandering around the house aimlessly seeking something to do. (See #1.)
Buyer’s remorse is bad. But seller’s regret can be worse.
Start planning the transition from your business to exit on your terms, so that you can sell when you want, for your price and to your buyer of your choice.
Then you can move forward after leaving the business—and your worries—safely behind.