I had the privilege of chatting with Bo Burlingham, former executive editor for Inc. magazine and author of several books, including Finish Big: How Great Entrepreneurs Exit Their Companies on Top.
We talked about one of the key discoveries that led to the book, namely that so many business owners were unhappy after selling their companies. It didn’t really matter how much someone got for their business – some sellers were delighted while others were depressed and miserable.
What made sellers unhappy? Burlingham spent years doing interviews to find that out. And one of the biggest issues he found is that people didn’t have a place to redirect their passion and energy.
For many entrepreneurs, the business becomes their identity. It gives them direction. Without that outlet, some former business owners become unmoored. Suddenly, their phone isn’t ringing as much. No one needs them to make hard decisions anymore, and that can be troubling for some folks.
Burlington describes these owners as “wandering the desert.” They’re searching for that new thing to get excited about, and some of them take years to find it.
You might think a little wandering sounds fine, but retiree beware! There’s actually research that shows early retirement can increase your chance of early death.
A 2019 study conducted by economists at Harvard and State University of New York found that cognitive decline accelerated when people left work. Researchers contributed it to the loss of social engagement and connection that many people find in the workplace.
And yet business owners should not delay selling. Ironically, the best time to sell is when you’re engaged and excited about your business.
Buyers pay for the future cash flow of the business, and that means you’ll get the most value when you go out on the upswing. Buyers feed off your energy, so you want to show them someone who’s really truly passionate about where their company can go.
But the kicker is, you need to be passionate about your next steps, too. It’s important to know what you’re headed for, not just what you’re leaving behind.
When an entrepreneur’s identity is wholly tied up in their business, that can be a red flag. It’s a sign they might hold on to the business too long, past the point where their leadership is the best thing for the company and its value.
That’s why we ask sellers to go through a “bucket list” exercise. Think about what you want to be remembered for. What captures your interest and enthusiasm, besides your business?
Selling your business should be the first step in your best chapter ever. You’ll have the gift of time and money – and the opportunity to do anything with it you want. The best thing for your health, your happiness, and the value of your company is to know the next chapter you want to write.
For advice on exit planning or selling a business, contact Al Statz, CEO of Exit Strategies Group, Inc., at firstname.lastname@example.org. Exit Strategies Group is a partner in the Cornerstone International Alliance.