Most owners don’t like the word “exit”. Talking about it makes them feel uncomfortable. It’s the elephant in the room.
I can somewhat understand. A life insurance salesperson doesn’t start with “so let’s discuss what happens when you die”. For owners, leaving the business is a little bit like death. Your company has been the central focus of your life for thirty or more years. It is engrained in your persona, your self-identification, it’s frightening to think of that part of your identity disappearing.
Who is Bob?
When Bob leaves home every morning to run Bob’s Widgets, he assumes the superhero cape of the owner. He walks in the door of the business as the head honcho, the boss. The cape never comes off. The team may go out for beers after work, but the boss is never really, just one of the guys. Just as importantly, the cape is always present in his personal life. At the kids sporting activities, he is asked to sponsor. In his church, at the Chamber of Commerce, and at parties he is introduced as “Bob, the owner of Bob’s Widgets”.
The “Exit Word
The word ”exit” has a finality that jars a lot of owners. Advisors often try to use a lot of alternatives, like transition, succession or continuation – all of which imply an ongoing process, albeit one that doesn’t include you. I face up to it because it’s the elephant in the room. I am an Exit Planner. I use the “exit” word to describe the final outcome of a successfully implemented business plan. It usually involves a transaction, with legal documentation of a sale or other transfer mechanism. It can also include a detailed strategy for succession to family members or a management team. I often discuss continuation – what happens if the plan is accelerated by unfortunate circumstances. Retirement might have a place in the conversation, or it might be about designing a “second act” or pursuing a life’s passion.
Let’s Be Honest
Let’s agree to call a business transition what it is. Whether an owner wants to sell to a third party, create a family legacy, finance a leveraged buyout to employees, or just close down in an orderly manner, the ultimate objective is to “exit”.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.