"I'm Just Worn Out."

At the end of a client meeting that covered a number of facets of the business, my client turned to me as I was about to leave and said, “I’m just worn out.”  We were working on prepping his business for an eventual sale so that he could retire, and had been talking about things that would help to maintain the business performance during a selling phase so that the business value would not be eroded.  After 30 years of building, selling, managing, and running the business, the owner simply wanted to move on, and here I was, encouraging him to make one last strong effort to not only continue what he had built, but to work through the added responsibilities of the sales process as well.  It was just a little overwhelming for him at that moment.

You might be surprised to learn that this story is not that of a single client.  It has happened similarly in my coaching experience several times.  Each time, I have found myself pondering what it means related to aging, and what it can teach me related to my own entrepreneurial experience.

The conventional wisdom about the ownership transition of your business says that you should prepare at least 3-6 years ahead of your retirement by working on several aspects of your business that will improve its value to an acquirer.  Of course, there is also a body of thought that says you should prepare to sell your business from the day you start the business.  (Begin with the end in mind.)  I support these recommendations.  I think they are exactly right, and that type of preparation can do wonders for the amount of money you might harvest at the time of sale.

However, for small businesses (generally under $1 million in value), most owners find themselves so wrapped up in the day-to-day operation, that they find it hard to shift into the “prep for sale” stage.  So they wait and delay until they wake up one day and realize that the time has come to kick back and enjoy the rest of their life.  It could be that their spouse is encouraging them to travel, or spend more time with the kids, or move to a different location.  It could be health related.  It could be that other transition plans haven’t materialized, and selling is the only remaining option.  It doesn’t matter the reason, but the fact is that taking another 3-6 years to prepare for an eventual sale, which could take another 1-3 years, seems overwhelmingly long.  And even the likelihood of harvesting substantially more money in sale proceeds with a more valuable business, doesn’t seem worth the effort if it means sacrificing the retirement time they seek.

It’s hard to be critical of anyone who has reached this stage.  The owner may have built a business that has supported his family for his entire career.  We don’t need to judge that they have missed an opportunity for more equity.  It is what it is.  But what lessons can we take from this?

• Even though it doesn’t seem to apply in the situations I’ve described, it is still wise to prepare your business ahead of time for its eventual sale.  Doing it early helps ensure you have the energy and will to ensure a higher level of equity that can be liquidated.

• Although there is an overwhelming feeling that “it is time” to move on, find someone, maybe a business coach, to help push you just a little bit farther, so that you can retire without regret that you didn’t achieve a sales value that you hoped for.

• Educate yourself about the selling process of your business so you can anticipate the effort and probably timing.  A good place to start might be my book, Final Act Of Ownership.

• Since for many small business owners, their business equity is their retirement account, it behooves them to manage that account just as they would manage an investment portfolio.  We might work with an advisor to do that, but even if we do it on our own, it helps to work on the little things that add value to our business each week, each year that we are in business.  Of course, this is the proverbial working ON your business instead of just IN it.

• And if you find yourself in the situation where you feel like “I’m just worn out”, do what you can to sell at whatever level of value you can, as opposed to simply closing the door and walking away.  Then go enjoy the rest of your life with no regrets, but with the satisfaction that you were an entrepreneur that supported your life with your own independent business.

Note: Final Act Of Ownership can be found at www.amazon.com/author/jerrybaltus.