We helped two of our clients exit their businesses in 2022, and both of them seem to have turned out well.
One still holds 10% of the company stock, and his five kids have 90%, but if they disagree, a feature of the buyout is that they have to get at least 51%, and they need the 10%. We approved this deal. And the former owner has returned to his roots, which is product innovation. We’re doing some research for him to round up some grant funds.
In the other case, the owner sold to his two sons, and has no formal role, but he’s developing his photography business, which he’s had as a hobby for many years, and travelling, which he and his wife have put off for years. So, he’s likely to have another viable business to run, but he can do it around the travel and the travel fits with photography.
The point of these two vignettes is to exit the right way. Here are some other tips (most cribbed from Marshall Goldsmith writing in CEO Magazine):
- Continue caring about the long-term strategy of your company.
- Do not overstay your welcome as head of your company. You know when you’re burned out, and you’re not contributing to the success of the company.
- Do your best to develop great successors. Have the successors work in the family business.
- If you have an exciting future after your company, you’ll leave happy. Otherwise, you won’t. I know in both cases above, the former owners are happy.
- Plan your post-owner roles. What do you ‘really’ want to do? Take some time off to think about it, but not too much, lest you go stale in your thinking.
- Would a venture capitalist invest in your new venture? Did you write down a business plan? (Even if you didn’t do the biz plan for your first company.)
- Don’t forget the fun factor. Your next venture should be fun; otherwise it’s too much like work.