Don’t get trapped in a limited vision
I slipped on a pair of prescription sunglasses while driving recently. Immediately it was apparent that something was wrong. My view was blurry and out of balance.
My first thought was fog or dirt on the lens. But in fact, one lens had fallen out on the passenger seat. My vision was out of whack because one lens was missing.
Sometimes our vision about the future is blurry because we aren’t considering the whole picture but only parts of it.
This can happen to owners who are so wrapped up in day to day that they can’t see another perspective. Some can’t see the possibilities of what is ahead but rather are influenced by fear of what they might lose through a sale: their identity, their purpose in life.
Let’s unpack these thoughts.
Over the past ten years we’ve spoken to many owners. They generally fit into two buckets:
- Bucket One: I’m not ready yet and not sure I ever will be. I’m going to retire only when I run out of steam, and that’s probably a “few years out”. This is my life. I can earn more at work than I would ever get in net proceeds through a sale.
- Bucket Two: I’m ready. I have saved for retirement. I have things I want to do. This business has been my life long enough. I am ready for something different, and have some things already identified. I don’t have the passion for this anymore, but I do care about what happens to my business and my people.
Which defines you?
We generally represent sellers of private companies, and most companies are 20 to 30 years old. The vast majority are in their first generation of ownership. Some are in their second generation. Very few go beyond that.
It is most productive when we talk with owners who are ready to act, and who have thought about life after business. They generally have an idea of what they want to do, and are ready to let someone else take the business to the next level. They care about money, but it isn’t their sole objective.
It is tough to convince someone to act who sees no hope in letting go. But if you are of a certain age, doing nothing generally is not a good course to take.
It is sad when an owner cannot let go, either for financial or emotional reasons. When someone says they cannot afford to sell, or don’t think they’d get the value they “need”, you have to wonder. Are they really being honest with themselves, their families, their partners?
OK, we understand. After decades of running a business, it can be hard to let go and to sell.
But there are cases where owners stay too long. The company value may diminish. A sale may not even be possible.
As you think about things, make sure you are not limiting your perspective. Many have successfully transitioned and are enjoying a full life after business.
Consider this strategy: Make solid plans. Decide what you want your legacy to be. Develop goals for your time. Make sure you have assets beyond the business. Doing these things, you will have a better chance of making a good decision when it comes time to consider a sale.