Seven Reasons to Sell Your Business

Business Owners are a special breed! They are independent people who want to be in charge, to make decisions. They love what they are doing – work is fun. Work is satisfying. Their work defines who they are.

As long as things are going well the thought of moving on and selling their business is foreign to them.
But a time will come to sell and move on. As a business owner you need to recognize that your world is going to change. You need to anticipate those changes and be prepared to sell your business. The goal is to ‘go out on top;’ to sell your business on your terms, on your timing.


HERE ARE SOME KEY REASONS TO BE PREPARED TO SELL YOUR BUSINESS:

YOU WILL CHANGE – You won’t have the energy to keep the company viable. You’ll no longer have the passion for the business.
Maybe you, your spouse or other family member will have health problems that will keep you from spending the time you need to run the business.
Or you might run out of ideas, finding that what used to work no longer gets the results you want.


YOUR BUSINESS ENVIRONMENT WILL CHANGE – Global competition, new technology or changing employee values are some factors that will demand new thinking. What got you here no longer works. Your company must reinvent itself to compete in the new world.
Change is essential and you may no longer be the person to lead the needed change.


YOU NEED TO MAKE ROOM FOR THE NEXT GENERATION – Not just family businesses. Any business ‘worth its salt’ needs to have people who have the passion and the ability to lead the business into the changing future.
The future of your business depends upon identifying people with potential, developing them and providing opportunities to grow into leadership roles.
If you fail to provide opportunities for your best people, the very ones you need the most, they will leave perhaps moving to work with your competition.


YOU WANT TO ‘GO OUT ON TOP’ - You have made an investment and built a strong viable business. Now you want to ‘harvest that investment’ by selling it and moving into a new phase of your life. This might happen anytime, independent of your age.


YOU HAVE AN OPPORTUITY TO SELL YOUR BUSINESS - Perhaps, when your business is ‘at the top of its mark,’ a prospective buyer will want to buy it, making an offer the just too good to pass up.
But if you are not prepared to sell and move on, you may pass up a ‘once in a lifetime’ opportunity.


NOTE: Sometimes a buyer will want you to stay on for a short period to assure a smooth transition.
Others may want you to remain indefinitely and continue to manage the business.
The advantage, in either instance, is that you have withdrawn your investment and still have a role. Your challenge is to consider the opportunity carefully to confirm that this arrangement matches your long term personal plans.
In either instance you have only deferred your personal move to independence for a few years.


YOU WANT TO RELOCATE – Perhaps it’s time to move to a warmer climate – one where you don’t have to deal with winter and can play golf or enjoy some other outdoor hobbies year around.
Maybe you want to ‘follow the kids’ who have relocated so you can be near your grandchildren.


YOU HAVE A NEW PASSION – Maybe the business isn’t what you want to do anymore and you want to move on. You want to let go of this business and start a new venture.
Perhaps the business has changed and you are required to do many duties which leaves you with too little time to do what really matters to you; too many management responsibilities and not enough time to work on projects or too little time to see customers, etc.


Selling your business is not a ‘traditional retirement.’ It’s an opportunity for a transition and a new beginning.
The sale is an act of harvesting the investment that you spent years building. It’s moving into a new phase of life – one that gives you new purpose, new meaning and new opportunities.
Making a successful transition is a multi-year process that merges three elements: personal, company and financial.
Even though you don’t want to sell now it’s essential to start planning to assure success.

What are your perspectives on selling a business?
Have you sold a business? Describe the experience. What did you learn that you can pass on to others?
Are you pondering selling? What are your concerns?


Want to explore the subject? Check out my web site http://www.life-work-transitions.com/ or contact me at pkwendel@aol.com or 716 434 8688

MORE THAN JUST 'YOUR FINANCIAL FUTURE'

Pacific Life Insurance, the one with the whales in its TV commercials, asks the question “Are you prepared for your retirement years – twenty five or more of them?”


Of course, being a life insurance company the focus is on ‘Your financial future.”


Twenty five years of ‘retirement’ is a long time! And it’s a likely probability for a lot of baby boomers. And there’s more ahead than just the financial part. There’s your life - life after you, a business owner, sell your business!


Many, business owners have retained their financial and legal consultants to plan their financial future. That’s a good thing. It has been estimated that as much as 70 to 85 per cent of many business owner’s net worth is in her/his business. So it’s smart to have a plan to harvest that investment from the business and move it into a personal portfolio.


We all know of business owners who have no vision for life after retirement. So they just hold on to their business. They have no plans for the next phase of their life so they just keep doing what they know. They can’t move on! Instead of going out on top, they ‘stay when they should go,’ suffocating the business they built, that, in turn, sucks their personal savings back into the business to keep it alive.


It doesn’t have to be that way. In addition to having a financial plan, every business owner needs to plan for their personal future – their next phase – and for the future of the company without them.


The challenge is to think about their company and themselves as separate entities and to develop a transition plan, in advance, for each to go their own way. That’s more than just their financial future!


In future articles we’ll explore the non-financial elements of your future as a business owner contemplating retirement.

FIVE WAYS YOUR BUSINESS OWNER'S WORLD IS CHANGING - Why you need to think about it

Do you feel the earth moving under your feet? Every business owner is experiencing change. But each of you responds in the different way. Some anticipate and adjust – experimenting with new approaches and new processes. Others ‘hunker down’ and keep doing what worked, hoping that it will work again.
But the change is often so significant that ‘fine tuning’ what you used to do may not be enough. If you are unable to ‘meet your market,’ your company’s future is in doubt. Here are five ways change is occurring – some external, some internal.


Your Customers’ Buying Patterns are Changing Some are outsourcing, often overseas, products they bought from you. Some are abandoning old products and old production methods and no longer want the items your company used to sell to them. Or their product mix has changed and they aren’t buying as much from you that they used to.


Technology is Changing Your customer wants you to provide a better or different product/service - or produce it faster or cheaper. If you don’t or can’t meet their needs, they’ll find someone who will and you’ll lose that income stream.


Communication Methods are Different Face to face contact is still important to stay in touch with your current customers to understand how their needs and buying patterns are changing. You also need to be ‘out there’ finding prospective new customers and understanding how your markets are changing. In addition, you need to get the word out via the internet and the new social media. In addition to our web site, other electronic media (face book, blogs, newsletters, etc.) are essential to help prospects learn about your company’s unique capabilities.


Your Employees’ Attitudes Are Changing They know what’s going on in the world and in your markets. If they don’t see the company changing with the times, they get scared and start protecting their interests – working slower to make each job last, being unwilling to try new ideas, Or they leave your company to find new opportunities – often with the best people going first!


You Are Changing, Too Maybe you’re ‘running out of steam;’ losing your passion for this work. Maybe your knowledge and experience don’t match the changing world. Maybe you are ‘playing not to lose,’ no longer willing to take risks; not wanting to invest money in new methods, new equipment and training for your people. Maybe you don’t want to ‘get out there’ to meet with your customers and prospects – which brings us back to the first point!


The bottom line is that you need to ‘think bold and act bold.’ What used to work may not be good enough for your company’s survival and future success.


For you, the owner, its essential that you step back from your day to day problem solving and take a long term, big picture look at the new environment your company is operating in. And you may have to set a new direction to succeed in these new times.

Or, maybe, its time to face the fact that you and your company no longer fit in this changed world. If that’s the case, its time to transition into a new phase of your life: one that fits you and matches this different world.

Making that transition, as daunting as it may seem, is better than going down with the sinking ship!

TRANSITION - The Next Phase of your Life

Business owners – and other executives – often have a difficult time retiring or making the transition out of their current role into the next phase of their life. They ‘keep on doing what they’re doing’ because they get great satisfaction from their work – and, unfortunately, because they have no idea what else they what they could do.



Often, their financial advisors have helped them prepare, financially, but they are not ready, emotionally, to take that next step into the next phase of their life.


Daniel Pink in his new book “Drive” introduces some fascinating ideas for managers who want to be better leaders and developers of their staff. Looking deeper, his ideas provide clues for business leaders who are contemplating their personal work-life transitions. Here, briefly, are Pink’s keys to motivation:

• Autonomy – “Autonomy over task (what they do), time (when they do it), team (who they do it with), and technology (how they do it).
• Mastery – Becoming better at something that matters. “Challenges we face are uniquely matched to our abilities.”
• Purpose – Working on ‘a cause greater and more enduring than ourselves.’

This approach, rather than the ‘carrot and stick’ method, is what brings out the best in people and produces better results, according to Pink.


I believe that these were what business owners searched for when they made the decision to own a business. They may not have been aware but, as some subconscious level, they were looking for a work situation that would give then independence to follow their passion, build on their strengths and have control over what they do – to have autonomy, mastery and purpose in their life. Income potential was important, too. They may have expected to make more money but many business owners made a decision that to ‘go out on their own,’ even if working somewhere else would pay more.


But there is a downside to their thinking. Business leaders stay when its time to move on. For the same reasons they decided to start, they can’t let go. They hold on for too long – when it’s time to step aside and let new people lead – younger people with more energy, a willing to take risks and use fresh approaches to match new challenges. The company they created begins to decline, eroding their investment when they need to be ‘harvesting’ it to build their retirement nest egg.


The trouble with retirement is that it is viewed as an end – when a person stops doing something that gave meaning to life, and sees doing ‘nothing’ for the next 20 or more years. That’s not something to look forward to so they ‘stand pat.’


I prefer a process I call ‘Transition.’ Transition involves planning ahead – discovering what about life (in work and elsewhere) gives great satisfaction and build those factors into a new lifestyle – one they can look forward with optimism and enthusiasm.


What’s the key to making a successful transition? Finding something new that offers you fulfillment and a feeling of satisfaction. Daniel Pink’s three motivational factors: Autonomy, Mastery and Purpose are a good starting point.


Transition begins with choosing your new life purpose – and building it into the next phase of your life. The key questions is: What will you do that merges your passions, your strengths and an opportunity to serve to live a life that is meaningful and satisfying to you?


Maybe it’s an unfulfilled dream or a hobby. Maybe it’s for money – maybe it’s not. Maybe its full time – maybe its something that you do at a slower pace that matches your energy level while giving you time for other pursuits; exercise, reading, gardening, family, travel, etc.


Purpose is not just a hollow kind of ‘doing nothing.’ Purpose is something that is distinctly ‘you.’ Choosing it will take time. It’s important to start planning long before you leave your current work. I have worked with clients who took several months to sort things out and make a personal, lasting decision that best suited them.


Autonomy and Mastery evolve out of a clear purpose. Your purpose guides your decisions about what you will do, how you will work, and who you will work with. Over time, you will build on your unique skills to develop the mastery you need to achieve your chosen purpose.


What is there about your current life that excites you, that you enjoy and can build on to create the next phase of your life? How will you create your future doing something that gives you satisfaction and enables you to build a special combination of personal Autonomy, Mastery and Purpose?
What is your personal transition plan? I help business owners develop their work/life transitions into the next phase of their lives. I can help you. Contact me to set up a complimentary session to explore your options.


pkwendel@aol.com – 716 434 8688
www.peterwendelgroup.com

THREE RETIREMENT STRATEGIES

In my work with business owners, I encounter three strategies for dealing with ‘work-life transitions’ – often called retirement.



The first strategy is to ignore the problem and just keep on working – even after they have lost their ‘edge,’ their passion and their energy. They don’t have an alternate lifestyle to move into so they just keep doing the only thing they know. They stay too long and suck the life out of their business, significantly reducing the value of their equity in the process.


Then, one day, they’ve ‘had it.’ Without much prior planning, they quit – maybe because of poor health or because the business is failing and is no longer sustainable or they just ‘burnout.’ They have no idea what they will do next or what will happen with their business. They sell the business when they have to, instead of when the want to, maybe for ‘pennies on the dollar.’ And the life they are left with is empty, sterile, and directionless. They struggle between meaningless activity and boredom.


There is a second, special kind of people who successfully keep on working: artists, writers, some attorneys and others who work independently, without an organization to support them. Their value is their personal work, not the organization they lead. ‘Living their passion,’ they do it as long as they can, often into their 80s and 90s. For example, Peter Drucker, the prolific management writer (over 30 books) and consultant remained active, albeit in a somewhat diminished role until he died at age 95 in 2005. For him, his work and his passion were one in the same – to work is to live.


The third group follows a different strategy. They plan ahead, thinking ‘transition’ long before the time when they will leave the business. Even while still actively working, they regularly step back from the day to day operation of their business and begin to plan for the next phase of their life. Ultimately, they leave on their own terms.


This third strategy could involve starting a new business, take a new role in their original company or working somewhere else. Or they might work with a cause for which they have a great passion. This life of service gives them great pleasure and satisfaction -– giving them ‘psychic income’ while providing a much needed service. And they have time for personal/family pursuits.


There are several of keys to planning a successful departure from the business:

• Choosing the ‘next phase’ of their life,
• Building a sustainable, saleable business,
• Deciding whether to sell internally, to partners, associates and/or family members, or externally to an outside buyer,
• Fully withdrawing their investment before giving up control.

This whole range of decisions depends upon the owner's personal decision to ‘move on’ with their life and the personal transition strategy he or she develops to make the move. This personal decision becomes the basis for all subsequent decisions.


All this takes time – often several years. So it’s important to start early. Waiting too long can severely limit a person’s options both for himself and for the business.


The moral? Start thinking about the next phase of your life and regularly block out time to make choices about how you will create a meaningful, fulfilling life after your work/life transition.


What is your life strategy? What thought have you given to your future? What will be the next phase of your life – after you transition out of your business? What are you planning for the future of your company after you move on? When is that last time you took time to give this serious consideration? What are you going to take some more time to do it again?


I work with business owners who are contemplating retirement. I can help you. Contact me to explore your options and develop a plan for your future. Call me by April 30 and our first conversation is complimentary.

WHAT'S WITH THE NAME?

I considered a bunch of names for this blog but, in the end, the decision was pretty straightforward.



My family and I brainstormed a list of names: Moving on, What's next, Your next move, Into the future and a lot of really neat ones but none of them were available.



I had also thought of three others.



Transition Success and Transition Strategies were high on my list. They are at the core of what succession planning is all about. Succession includes several different versions of transition: transition of leadership, transition of ownership and personal transition from a life centered on work to a life that has a different, equally meaningful and satisfying purpose.



We'll be exploring various aspects of transition in future blogs - as part of succession planning.



I finally came to the choice of SUCCESSION SUCCESS. That covers it all. And it's a phrase that everyone identifies with. And like the old Prego ad 'transition is in there!'



Next time, we'll begin to explore succession planning and the various aspects of transition. And in the future, we'll go lots of other places!



It's good to be with you. See you soon.



Pete Wendel