Imagine this for a moment. You and your spouse get divorced. No matter how amicable it is, it still hurts. Even though you signed the divorce papers, you still love them. Then, for the next six to eight months, your ex’s new spouse moves into your house, kicking you out of your room. Day in and day out, you are living a shell of a life watching your spouse, your children, heck even your dog, go about their new lives with someone else in your shoes. With the exception of someone occasionally swinging by to ask advice, you’ve become a ghost in your own home.
That’s how it often emotionally feels to work in your business after you exit.
If you think I’m being dramatic, I’m not. While it’s true I’ve never been divorced, I did sell a business I slaved over to build. Then as part of the transition I stayed on for twelve months. Day in and day out, I came in to watch the business I built come under new leadership. The new owner took my office, my calls, and commanded the attention of the team I assembled and cultivated. On top of that, all the worth I derived from owning and operating my business rapidly dissolved away.
It’s hard to anticipate all the feelings you will experience after the sale when you are in the middle of closing the deal. If you think you’re emotionally ready to leave your business, you’re not. But there are things that can help get you there.
Understanding Your New Role
For liability reasons, the majority of business transactions are asset sales. To give you the skinny version in an asset sale, what happens is that you close the deal on a Friday, then effectively you sell the new owner all “assets” of a company. Since employees are not assets, you fire everyone Friday afternoon and the Buyer the hires the team on Monday under a new company entity. You’ll have a laundry list of tasks to formally close the old business, but many can be outsourced to CPAs or lawyers.
That team that gets rehired on Monday…it includes you.
As part of the transition, it’s customary for the owner to stay on for a period of time. That length of time varies if it’s an inside sale, outside sale, or due to the financing option. Inside sales and owner financing options typically mean the owner stays on longer, sometimes as long as a few years. We recommend that you stay engaged until the final payment is received so you can monitor the situation.
Your role has officially gone from owner, chief officer, captain, and leader and move into the “employee.” Moreover, you’re the employee who needs to learn to coach, mentor, and guide from the sidelines. You have the playbook, but only enough influence to recommend a few plays here and there. You’ll probably even be required to execute a few plays you know are going to end horribly.
Here’s the catch: entrepreneurs make terrible employees. We often call it the “entrepreneurial stink.” It’s why former business owners can’t hold down a regular old j-o-b. They no longer fit the mold. Coaching isn’t exactly a finer skillset either. Now you need to learn to do all these skillsets you aren’t genetically designed for within your own company. You also need to rustle up that drive to win for someone else.
This isn’t to say that you can’t do well in this role. It’s to make you aware that in order to succeed, you’ll be going against your own genetic grain. You can’t drop the microphone and leave the stage. You’re no longer in the performance but you have to work behind the stage to make the program go on.
Let’s be frank here for a moment. As a business owner, you command a lot of respect. People answer your calls. They vie to get on your lunch circuit. Groups pay attention when you talk. Over the last few decades, you’ve banked a large portion of your self-worth and sense of purpose through this business.
But soon, very soon, you won’t be a business owner any more.
I’m not here to say you no longer have value—quite the contrary. You have tremendous worth. The thing is that you will feel as if your value disappeared over night. You no longer have a full agenda driving you out of bed in the morning. Your calendar went from a daily street fight to, well maybe you’ll hit the golf course. Again.
If we’re completely honest, however, as much as we’ve joked about wanting to sit at a beach all day and sip fancy drinks, we know deep down we can only sit still for about fifteen minutes. That’s why high-caliber athletes like Michael Jordan and Brett Favre struggled to debut in retirement, or in Favre’s case, put it off far longer than he should have. For goodness sake, Michael Jordan tried baseball!
In order to succeed in the next chapter, you need to start developing a system to reestablishing your own self-worth outside of the business. You also need to find meaningful ways to fill your time. Insert hobbies, side projects, and charity boards. Taking a board role or stepping into a CEO round table oftentimes works perfectly. They allow the freedom and flexibility of retirement dashed with the adrenaline rush of staying connected to the business world.
Establishing—and Going After—Goals
What if I told you that these issues were life and death? You’d probably laugh. I’m dead serious. Today, we’re seeing retirement kill high-caliber achievers at an alarming rate. Any idea what Joe Paterno, Roger Ailes, Charles M. Schulz, and Andy Rooney have in common? They all died shortly after stepping down (or being forced) from their high-power position. Retirement put the final nail in their coffins.
You’ve spent the last several decades of your life going after big, seemingly impossible, goals. There were few moments in your day you weren’t thinking about how to do it better, faster, and more effectively. You can’t just turn that off. As I’ve demonstrated, ignoring it is a serious issue.
That’s why you need to define and work toward achieving goals in this next phase. It’s so pivotal for your long-term success and health, that I recommend transitioning owners partner with life coaches to assist in developing powerful purpose in retirement. Most exiting owners initially balk at this suggestion. As mentioned, forging ahead alone is built into our DNA. But this is uncharted territory with serious consequences.
Tackling the Whole Picture
One thing that defines our approach to business exits and transitions at Exit Consulting Group is we work with you throughout the entire process. We deeply care about your long-term success, which is why we address the emotional side of exiting your business.
Exiting your business isn’t just a nameless transaction. It has deep implications for you and your family’s future. Too often business owners kill an impending deal at the last minute because they haven’t addressed what comes next.
If you are thinking about exiting your business in the next one to three years, contact us today. Not only do we get the business ready to hit the market, bring buyers to the table, and execute the transaction, we also work with you directly to ensure you create and achieve your goals for the business.
Retirement should be a rewarding time. Let’s make sure that happens. Contact us today.