Thoughts about Planning your Exit Strategy
A few years ago, Brett Favre retired as the long time quarterback for the Green Bay Packers NFL football team. Apparently he wasn’t ‘prepared’ for retirement because a few months later he signed with the New York Jets. This season he joined the Minnesota Vikings and led them to the conference championship game.
When Favre went through his “I’m retired, I’m not retired” turnaround, I wrote about it, drawing an analogy between him and lots of business owners contemplating retirement. Now, at forty – he’s the oldest quarterback in football - he will soon face the same situation once again. It’s only a matter of time before he retires, voluntarily or otherwise.
You, a business owner, will someday be facing the same challenge. You’ll be asking similar questions like “How will I retire?” “When is the right time?” What will I do with the rest of my life?” And others like “What do I do with my business?” “How do I get my money out?”
Unlike Farve, whose focus is primarily personal, yours must be in three areas: Financial, Business and Personal.
One presumes that Favre is set financially. With the help of your financial and legal advisors, you are addressing this. (You are, aren’t you!?)
From a business standpoint, the management of the football team has planned for the team’s continuity. Indentifying and developing their next quarterback, along with players for other positions, is one of their responsibilities. Continuity of the team is not part of Favre’s MO.
Business continuity is a challenge you and every business owner must address to assure that you can withdraw your investment from your business to your personal investment portfolio. Whether you sell internally, to your partners, family and/or staff, or externally, to outside buyers, you need to develop an exit strategy. That strategy will determine your transition plans. To successfully implement your plans it’s important to start early. It’s a long term process.
Probably the biggest challenge, whether to Favre or to you, is the personal side. Favre is ‘only forty,’ probably with more than half his life ahead of him. But he may have no choice about when he retires – the team management may make that decision for him.
You can expect a life after ‘retirement’ of twenty years – maybe more. You have control over your timing. It’s your business. But if you hold on too long you may see your business – what you worked so hard to build – wither away, diluting your investment as it goes.
In both instances, Favre and you, the key is to rethink ‘retirement.’ It’s not the end. It’s a ‘transition’ from one life style to another. I hope that Favre, after his retirement dilemma of a few years ago, spent some productive time building his ‘new life after football’ so that he has something to move into, to look forward to. I call this “Building a boat to step into when you walk of the dock.”
What about you? It’s important to start early making personal and business decisions that weave together financial, business and personal factors to create a transition that assures a meaningful, fulfilling life, provides adequate income to live it and, if you want it, leaves a successful, ongoing business as your legacy.
It’s never too early to start planning your transition. How about today?