Avoiding the Rolling 5-Year Exit Plan
After Miles told Sally that he wanted to do something to make sure that he could leave his business on his terms, Sally asked him an important question. “Have you decided precisely when you want to exit your business?” Miles sheepishly slid his BEI Value Driver Analysis across the table and opened it. He pointed to the following question that he had filled out:
“I don’t have an exact date,” he said. “And since I haven’t really thought about it, I put a ‘1’ for importance. I figure if I haven’t thought about it, it can’t be that important.” “Can you tell me why you don’t feel that your exit date is that important to you?” Sally asked.
Miles paused. After a moment, he said, “If I fix a date, that means I’m committing to exiting. But I love doing what I’m doing now.”
While Miles recognized the need to plan his exit, he didn’t want to face the heart-rending thought of separating from his business.
“So, I guess I’m saying I want to leave in about five years, but I don’t want to set an exact date.” He began speaking more feverishly. “Besides, if I’m not running my business, what will I do? What will happen to my business? Without my business, what will happen to me?”
“You obviously care about your business a lot,” Sally said. “I can’t stand the thought of it failing, but I also can’t stand the thought of not being able to leave,” Miles said. Sally’s ears perked up. She knew that Miles needed to draw a line in the sand: a deadline. She knew that once Miles set a deadline, she could help him create the timeline to accomplish the necessary tasks to achieve his exit goals. But most importantly, she knew that the only way to get Miles to act was to focus on what he wanted, not what she knew. Unless Miles had an emotional reason to set a deadline, he never would.
“What if I told you that by setting an exit date, we can take steps to make sure that your business is ready for your exit?” Sally asked. “Having that date in mind lets us do the things we need to do to let your business thrive as you get ready to leave. You’d still be involved, but as we moved closer to your target date, you’d be transitioning into fewer responsibilities and more free time.”
“But what if it’s not ready by then?” Miles asked. “We’ll use that date as our goal,” Sally responded. “On that date, the business will be able to continue with minimal disruption to its cash flow without you at the helm, regardless of whether you leave.”
“So, if I’m ready to leave then, I can. If not, I don’t have to?” Miles asked. “That’s right,” Sally said. Miles thought for a moment, then nodded. “That makes sense,” he said. “Can we make five years from today our target?”
Helping the Head and Heart Agree
Logically, we might assume that once business owners appreciate the amount of planning and number of actions that go into their successful exits, they would demand immediate action. But logic fails to motivate business owners to act because they are emotionally not ready to face the consequences of being separated from their businesses. They enjoy being owners. They are emotionally and financially satisfied doing what they are now doing. It may not be logical, but many business owners delay doing what they know they need to do because they cannot imagine a more satisfying life post-business.
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