Your business and your legacy go hand in hand. The time to consider the latter isn’t after you’ve sold the business, but rather, before or at least during the process of finding a buyer and completing the transaction.
A legacy means something different to each and every business owner out there. What does success after the exit—and after you leave this world you’ve built—mean to you? It’s an uncomfortable topic, but one that we need to address.
Living Your Life
When designing your exit, your desired lifestyle is our most immediate concern. You’re trying to determine the sale price of your business, how you can maximize that price, and what you want to do when you effectively “retire.” I use quotation marks because many entrepreneurs simply cannot stop the hustle, even after exiting.
You worked your entire life to reach this point. You earned the exit and the enjoyment that should follow. If you don’t have kids or anyone you want to leave anything to, you might choose to live a bucket-list lifestyle. Congratulations, that’s a big win in the game of business and life. That said, you still need to do some financial planning.
Leaving a Legacy
For those who wish to leave money and/or assets to their family, or perhaps give to a charity, this is a key piece that we as business sale consultants need to know before we explore the possibility of selling your business.
What do you want to do with the money from the sale? After the high risk of running a business, some sellers will go out and buy real estate or stocks, which are far less risky investments. Are you going to use the equity in your lifetime, or save it for future generations? How much of an inheritance are you going to leave, and to whom are you going to leave it? These are questions we want to ask and answer before moving forward with a sale.
There is a big difference between preparing to leave money for your kids and preparing your kids to receive that money. When you have a potentially substantial liquidity event, you can’t expect them to know what to do with the money on their own. If you don’t clearly define your legacy, it could wind up being a fight over inheritance that breaks the family apart. I’ve seen it time and again, this avoidable heartbreak that ruins what you’ve built. If your business exit involves keeping the company in the family, you need to consider when to sell to the next generation and invest the time to teach them the business, so they can carry the torch with confidence.
Planning for the Future
What you want to happen with your money affects how we plan your exit. Leaving your business requires planning for your mortality, which is never an exciting conversation. However, it can be a rewarding and uplifting one when you realize that you are in complete control of your legacy. Let Exit Consulting Group help you navigate the journey.