Former Business Owners Express No Regrets About Selling Out
"I can't play golf every day."
"My wife wants to see more of me-but not at every breakfast, lunch, and dinner!"
"What do other ex-owners do after they've sold out?"
Failing to answer these concerns creates vacillation, reluctance, and ultimately, an unwillingness on the part of many owners to proceed with planning for their business exits.
To examine these concerns, BEI assembled a panel of experts in the owner to former owner transition. To a man, each reported that selling out was the "best thing possible for me and for my family." That said, each owner approached the sale differently and each has pursued different interests in its aftermath.
Tom Frankl was 62 when he sold his high-tech manufacturing firm. He was prompted to sell first when his accountant introduced Tom to Exit Planning and helped him put in place a successor management team. Complementing this concrete Exit Planning step was Tom's realization that his emotional connection to the business was loosening. When these objective and subjective events converged, Tom began working with his advisors to orchestrate a sale.
Bill Dirrito, the owner of a clothing and apparel manufacturing company, entered his business with one goal: reach $50 million in sales and sell out. Bill reached that threshold and determined that he'd have to make a huge investment to retain his current market share; so he hired a transaction attorney and an investment banker and sold the company.
Unlike Bill, John Six, the 55-year old owner of a low-tech manufacturing company was not focused on an eventual sale. In fact, he didn't want to sell because he felt he finally "had it going just right."
When confronted with the idea that the time to sell was when there was upside potential, John started thinking about the hard times he'd been through. If hard times returned, he wondered if the company could survive and knew that "upside" would be the least of his worries. He, too, made the call to his advisors.
Having all arrived at the closing table via different routes each now-former owner has found a similar satisfaction in the decision to sell and in life after the sale. Tom arranged his sale so that his employees kept their jobs and gained greater career opportunities. This gave, and continues to give, Tom great peace of mind. While he did not have a detailed plan in place for life after the sale, he quickly found new outlets for his energy. He has become the "Park Superintendent" of his 70-acre
John echoes Tom's comfort with this decision. "Of course I wondered what I would do [after the sale] because I was in that business for 30 years. But the day I walked out of there I never looked back. I never missed it. It's incredible but my schedule is calendared 18 months ahead."
On John's calendar are motor home vacations, developing an industrial park and expanding his world class collection of race cars. John leaves the house by seven each morning and doesn't find his way home until late afternoon.
Bill, the planner of the group, anticipated that he'd need a place to go to--outside of his home--on the day after the sale. He rented and equipped an executive suite and mapped out the first three months after the sale. Today, he spends time on his hobbies (golf, horses and motorcycles). He has educated himself about investing, advises other business owners and manages his own portfolio.
By any yardstick these former owners remain engaged and vital. They have moved into a new era in their lives--an era untroubled by financial concerns.
Subsequent issues of The Exit Planning Navigator® discuss all aspects of Exit Planning.