In a recent consulting call, I was speaking with a contractor who is going to be 60 years old soon and now he had questions about what he should be doing next in his life and what those decisions will mean for his business.
Turning 50, 60 or older will certainly make you stop and reflect a lot.
It also made me think about how often over the years I’ve been asked these same type of questions about what direction to take a business and what impact that has in the contractor’s personal life and vice-a-versa.
Most contractors are missing something because we are so darn busy running our business that we forget why we went into business in the first place. And most certainly we’ve never thought about what our end game should and could be.
A simple definition of end game is defining what your business will look like when you’re done building it.
To that, I’d add: “What will you do for an Act II (or Act III or more) in life?” and “How can you create a smooth transition?”
This set of questions and this whole concept plagues little businesses and big businesses alike. What helps is having a plan that fits you. And if you don’t stop and make a plan, you’re being planned for and you don’t even know it.
I’m called upon to offer advice to contractors seeking to get their businesses into shape, get their businesses ready to sell and getting their businesses ready to grow. A lot of that has to do with where the owner is in his end game plan. Depending on the size and health of the company, there can be multiple options to pursue. One common mistake is not stepping back and looking at the whole picture. And the whole picture is looking ahead at both your personal and your business goals. They must be in sync.
The reality is sometimes we need to exit our business for health reasons, we’re going broke, we hate what we do and want to do something else, new management and/or family members are coming up the ranks or coming on board or we’re aging and there are other things in life that are calling to us.
There is no shortage of reasons to plan and to create a formalized end game.
This planning starts with an honest and objective assessment of what your business is worth today to someone interested in buying it, what’s working and will continue to work, what’s not working and why, what do you want your business to do for you vs. what you have to do for it.
Professional advice from a certified financial planner is a great place to start. He can take an objective look at both your personal assets and the business assets with you and better assess what you will need to live the lifestyle you desire. Then, it’s time to get real.
Most of us forget that we went into business for a reason. Those reasons also vary but typically it’s the desire for financial freedom, a chance to be our own boss, to build a legacy that we can pass on to our family and our desire to enjoy success.
Unfortunately, we get so busy with dealing with the day-to-day of business that it can get so overwhelming, and we don’t take the time to look ahead and plan.
I get it.
That said, I encourage you to think of this approach to running your business as if you were driving your car with your eyes on the road ahead vs. driving your car while texting. You’re going to crash … it’s just a matter of when.
What lies ahead?
What options do you have when shaping your end game exit strategy? Here’s just a brief list:
1. You can fix what’s wrong with your business and fall in love with the work you do and regain your health.
2. You can take on a partner to help shoulder the load as long as you do your due diligence about who you’re getting “married to” and you get your exit in place just in case the honeymoon ends.
3. You can create a transition plan to younger family members and/or management (if they exist) to take the helm as you begin to step out. This, too, takes planning and exits for all.
4. You can sell the business to an outsider and go do something else whether it be business, pleasure or volunteering. It’s individual and you will want to think hard and long on what would be fun and rewarding, depending on what you need and want in your life ahead.
5. You can sell the business to your employees if the business is systematic and the management team is in place that can run it so you don’t get dragged back in. Financing options and objective benchmarks are a must. How cool is it when those who have worked for you can begin to work for themselves as you head toward your next phase in life?
6. You can just close the doors if the business can’t be sold and you know that every day you stay in business you’re digging a deeper hole. There is no shame in doing this if you’re not committed to the longer and tougher road of fixing the broken business. The only shame is keeping the wheels spinning if you’re already stuck in a ditch.
The biggest thing is to plan, gain clarity, get help in this process if you need it and then act. Procrastination will rob you of your options. That’s no way for the game to end.