Today’s newsletter is written for the privately-held business owner who is interested in starting the process of examining their personal / mental readiness for a future business exit. The term ‘mental readiness’ can often times be loosely translated to mean the amount of time that you would like to keep working in your business. It is simply a fact that so many owners of private companies are tied to their business at a very personal level. In many cases, a business is a representation of that owner’s decades of hard work as well as that owner’s personality. It is the intention of this newsletter to assist you in being better prepared for what may one day be the largest emotional transaction of your life. The sooner owners start to consider these issues the better prepared they will be for a future business transition.
The Business as a Status Symbol and Alter Ego
Most successful business owners have a relationship with their business that goes beyond the financial benefits provided. At a more personal level, a business owner is the boss for all of those around him and owning and running a privately-held business is also a status symbol of success. In fact, owners will often employ folks right in their own communities, further reinforcing and strengthening those personal identifiers with the company.
Beyond the status as a ‘successful owner’ it is the case that owners also tend to enjoy what they are doing and have a difficult time visualizing what they might be doing if they were not owning and running their private businesses.
The following ‘mental readiness’ questions should help you get focused on the type of attachments that you have to your business and how you may work, over time, to find ways to eventually turn over your business to another owner.
Mental Readiness Question #1:
Do I take a larger than average (i.e. more than 3 weeks) amount of vacation time each year and, while I’m away, am I able to substantially limit the work that I am doing and the frequency with which I check e-mail and / or call into the office?
This first mental readiness question goes right to the heart of the matter for most owners – the fact that most owners are interested in keeping a close eye on their business and are unable to truly disconnect from their business, even for vacations. Now, if you are an owner who has no problem getting away from your business and leaving the worries of the office behind while you are on vacation, then, again, you are in the minority. Most owners work while on vacation and, in fact, take relatively little vacation time each year.
The reason that this is such an important indicator of an owner’s mental readiness for their exit is two-fold. First, it is an indication that the business is likely dependent on your individual efforts to keep it running. In this case, a transition to a future owner will be more difficult because the business is so tied to what you know and how you run the company. In other words, without professionalized systems and management in place, it begs the question as to how someone else would be able to run the company without you.
The second reason that the question of vacation time is so important to your eventual exit is because it is an indication that without the business to provide meaningful and fulfilling work for the owner, a void will exist that the owner may have trouble filling. Business exits can be difficult for owners because there is a loss of meaning in the work that the owner does. When people have work that provides purpose and meaning, they tend to work harder and apply passion to their pursuits. Moreover, if that owner does not know how to replace that work then it can be difficult for the owner to move on to their next pursuits, leaving the company to someone else.
For both of the reasons stated above, an answer to the first mental readiness question is likely to provide you with some personal reflections to what the business means to you as well as what you mean to the business.
Mental Readiness Question #2:
Do I approach not run the day-to-day operations of the business with the same enthusiasm as I once did and do I often feel ‘bored’ with the company?
This second mental readiness question goes to your feelings about the operations of your business. While a number of business owners are content and grateful to own and run their successful companies after many, many years of ups and downs, there are yet another group of owners who feel the effects of the daily grind of running their businesses and they lose their enthusiasm and motivation for running and growing the company. A tell-tale sign that you may be experiencing these feelings is when each issue and or problem in the business starts to bother you at a higher and higher level. Of course, this situation, left unchecked, could eventually mature from feelings of boredom to outright burn-out from the business.
When owners feel burnt-out from their companies, it is very difficult (arguably impossible) for those owners to exhibit the leadership that they need to make the business successful. Owners who have these feelings should give heavy consideration to the idea that moving on from the company and putting it in the hands of a new owner who will bring the company to the next level is likely the best course of action for most owners. If this is the case for you then it is advised that you take some time to reflect on whether continuing forward with the business under your ownership and leadership is truly in the best interest of all stakeholders to the business, including customers, vendors, employees, etc. Owners who do not want to work anymore because of burn-out can be described as having a ‘high mental readiness’ to exit the business and there are a number of options that you might want to consider to address this situation.
Below is a link to a 10 minute, 20 question online assessment that can assist you in determining your financial and mental readiness for your exit. There is no fee to take the assessment and your answers are sent immediately to your e-mail and kept completely confidential.
As a business owner who may be thinking through the eventual exit from their business, this complimentary online assessment may be the ideal starting point. And, after receiving your Business Exit Readiness Index™ Owner’s report, you may want to take a follow up meeting to discuss your further and gain more clarity on how you will have a successful exit in the future.