The success of exiting a business depends greatly upon the mental perspective - "seeing the big picture" - of the owner during the exit process.
The success of exiting a business depends greatly upon the mental perspective of the owner during the exit process. Too often, as business owners, we tend to fixate our thoughts on the business of running our businesses. When, in fact, there is a tremendous amount of value in seeing the ‘big picture’ with your exit. In other words, what type of lifestyle would make you happy after you exit your business.
Every business owner has personal needs and expectations that a privately-held business satisfies. These desires need to be articulated in order to effectively consider an exit plan. The owner who is able to see the larger picture, and understands that stepping out of a business is an opportunity to move toward a new stage of life, will be most prepared to execute a successful business exit.
Prior to considering any of the various options for exiting your business, you must be able to recognize two key elements within yourself:
As a successful business owner, you realize that you have created self-worth and profit for both the company and those around you, including your family members. In building a company, you have built a personal identity, perhaps the only one which is recognized by some family, friends, and business associates. Many owners, without properly considering their new, post-exit identities will be unable to successfully pursue a business exit because of their continued attachment to the business. In order to ensure a smooth transition, you want to be able to articulate both where you are in your business today and the personal challenges associated with getting you to where you want to be.
Developing Exit Skills
The key to achieving the vision for your exit is an understanding that the tools and skills which have enabled you to build your business will likely be of little value in planning your exit from the business. If you are using the same tools, skills and thoughts that you used to run and grow your business, it is very difficult to move on to the next phase. The primary reason why this is true is that the development of business value is not entirely consistent with the development of fulfilling personal needs and values.
Take a step back from your business momentarily and see the big picture of where your life fits into your business. Then see where your business fits into your life. You will soon see that your business fills your life, but does your life get filled by the business that you do?
A ‘big picture’ look at your situation will have you begin to ask questions about ‘why’ it is important to design an exit plan that meets the needs that you have defined.
Your ability to run your business must be adapted to meet the evolving needs of your life following the business exit. Therefore, defining where you want to be is critical- and the advisors and the people around you need to understand that where you want to be is different from where you currently are- otherwise, why would you be considering an exit? In order for this to occur and for your exit to begin to gain traction, you need to be able to define where it is you want to be in the big picture.
Time & Money Investments - PostExit
There are two main investments which will need to be made following the exit of a business, both requiring substantial forethought and preparation.
First, your wealth, or proceeds resulting from the business exit, must be invested to generate future income that you will likely no longer receive from your business.
Second, and perhaps more important for your ultimate happiness, your time will also need to be invested in productive activities in the future.
As an owner, having spent the majority of your time over many years building the company, you will now have all that time available to explore new opportunities. You may choose to start new business ventures, spend time with family, or take up hobbies- but it will be important to consider one’s options prior to an exit in order to visualize the larger picture, and what it is that you truly expect from your business exit.
Seeing the “big picture” in your exit involves taking the time to reflect on goals outside of the business - exploring your personal financial and emotional goals and needs and those of your family moving forward to the next phase of life. As in so many aspects of one’s life, perspective is key to ultimate success- by viewing your exit as an opportunity to a begin a new lifestyle instead of as a loss of your business identity, you can begin to explore the five major exit options, and, with the advice of your advisory team, to carefully craft a coherent plan for a successful future.
© John M. Leonetti
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