This title is paraphrased from an article from John Dini, the San Antonio based, nationally recognized exit planning expert. I have learned much from him over the last two decades.
The reason I publish my own post on this topic is that it comes up so often. The conversation usually goes something like this:
Owner: I would sell this business in a heartbeat for the right price.
Me: I can relate, but what would you do with your time?
Owner: I’d play golf, I’d fish, I’d spend more time with family, ... I’m not sure, but I’d find things to do.
Me: You can only play so much golf. It gets boring eventually.
Owner: I‘m willing to take the risk. <grin>
And the obvious counters generally include:
“Maybe not golf, but I’ll find other things.”
“I’ll start another business!”
“I’ll ‘consult’.”
“Maybe the new owner will hire me part-time.”
- - - - -
To be clear, none of these plans would be unworkable. They all have some merit. The issue is that they aren’t really plans though. They are just ideas that if left unstructured, end up being very disappointing post-sale. Having a true plan is important.
When you sell a business, you free up a substantial (repeat: substantial) amount of time. Most successful owners underestimate how much time they truly spend on their business. It’s common to only consider the actual time onsite, or time worked per se. The truth is that if we add in the time that we are mentally pre-occupied with the business, it starts to take up most of our waking hours, at least during a typical work week. If we aren’t at work, we are thinking about how to solve a problem related to work, even if it’s simply how to grow the business. That’s what makes us successful. When you remove the business, a gargantuan hole is left. That hole 99.99% of the time can’t be filled with just another hobby like golf, travelling, or even running (mine). You must find something greater, something that exercises your problem-solving ability, in order to fill that gap. That’s where planning comes in.
So, what is the perfect answer for filling that gap? I can’t say because it's a case-by-case situation. For me, it was a combination of working for The Alternative Board and doing business coaching, coupled with taking on more scheduled responsibility for caring for our kids (school activities, etc.). For other people it may be another type of retirement gig, or possibly scheduled volunteer work. The trick is that whatever the answer is for you, it must 1) exercise your mind, 2) provide a sense of fulfillment, and 3) largely fill the time you used to spend working on and thinking about your business. The third point is usually the biggest issue for retiring owners.
I write this now because I had the conversation above with a business owner last week. Although it always ends with a grin, the truth is that if we ever did execute a sale without planning for what comes next, it would end in disappointment. In fact, according to the Exit Planning Institute, over 75% of business owners that sell their business regret doing so within one year of sale. While there are many reasons I’m sure, one key reason is a lack of purpose post-sale. We need to clearly define how we will fill our time after selling our business if we are going to have the joy that we are hoping for post-sale.
If you would like to discuss how to structure your business for eventual sale, or possibly structure it such that you would never want to sell it in the first place, please reach out to me on our Contact page.
I wish you the best in all your endeavors.
Mark Goldman
PS: You can read more of John Dini’s blog articles here: Exit Planning Blog | Awake at 2 o'clock? (johnfdini.com)
I do not have the answer of "how will I spend my time" but I would like to try! Good post Mark.