Think of where you are now in your business life.  This is the present, now, or your current status quo.

Now think about where you want to be in the future with respect to ownership and management transition.  The future time may not be clearly defined in your mind.  But that future is your business end game.

Don’t confuse working in your business with working on your plan for your business end game.  It is a given that you will spend time working in your business.  However, there are other things associated with managing the wealth you create in your business that must be accomplished in the interim between now and any ultimate disposition of your interests.

It is okay if the business end game is unclear, but it is not okay for it to stay unclear for much longer.  You see, our business end games set us up for the rest of our lives, and that can be a very long time for most of us.

Two quick examples.

Perhaps one hundred years ago, a typical man would enter the work force at 16, work diligently for 40 years until he was 56, at which time he would retire.  Then, he might likely die at 57 years of age.  This man worked some 70% of his years on earth.

Consider a more modern example where a man or woman enters the work force at age 24 after college and a couple years of graduate school.  She works until age 65 and then retires.  Now, she lives for another 20 years until 85.  She worked less than 50% of her years of life.

You see, our business end games, which are not the end at all, must prepare us for the potentially long period of years comprising the rest of our lives.  We see the current status quo, business end game, and rest of life in the graphic below.

There is another important concept on the graphic, that of what I call interim time.  At its simplest, interim time is the time between our current status quos and our business end games.  I call it interim time because it passes, day by day, week by week, month by month, and year by year.

There is nothing about interim time that will force you or require you to begin to focus on the one or two, or perhaps five or six, major decisions you need to make – and implement – during the interim in order to assure that your business end game will be robust, complete and satisfying.  And, remember, your business end game must set you up for the rest of your life.

You may receive a shock or a warning or a wake-up call from something that happens in your life.  You many not.  Don’t depend on that to get started.

Let’s address a couple of key questions.

1. Who needs to work with you on your business end game?  You have to have your own vision, but it is often helpful to seek help, perhaps from your spouse.  After all, he/she is deeply involved in and concerned with the outcome.  You may need to talk to your fellow owners as well.  They may not share the same timing as you.  With planning, the business may provide the means of achieving all of your end games.
2. What professionals need to be involved?  You may have a trusted adviser, perhaps your accountant or attorney.  They will certainly need to be involved.  Since the value of your business now and in the future plays heavily into your business end game, you will need a competent business appraiser.  Your life insurance adviser may be an excellent source of help.  Many life insurance professionals serve in the capacity of coordinator for other professionals.  And you may have a financial planner and, perhaps, others from time to time.  The point is, all of these people will add value to your life and to your business end game.
3. When should I get started on planning for my business end game? Now would be a good time.  Procrastination is not your friend.  You may think that you’ll wait and keep your options open.  Invariably, your options will shrink if you wait too long, because many of your best options take time for their implemantations to take effect.
4. What will I do after I sell, gift, or otherwise transfer my business ownership interest?  I don’t have a specific study to back this up, but a surprising number of business owners are unhappy shortly after selling their businesses.  In most cases, they are not unhappy with the price.  But they just forgot to plan for what they would do after the business was sold.  An important interim time activity is working on what to do after formal retirement from business.  There will be life after you quit working the way you are now – unless you die unexpectedly – and you need to plan for it.
5. Will you have enough money to live the lifestyle you desire and to do the other things, charitably, for example, that you want to do?  This is the money question.  It is not a good idea to wait to achieve liquidity at some distant payday when you sell your business.  There’s too much at risk.  So what are you doing along the way personally and with the business to work towards the liquidity and diversification you will need for your business end game.  This is your hedge against adverse things happening with the business.  Don’t underestimate the importance of this hedge.

Think about your current status quo.  And think about your business end game.  Just reading a post like this can be helpful in beginning to crystalize your thinking.  And think about the rest of your life.

I know that when I started working on these concepts a few years ago, the business end game was murky and the rest of my life was a mystery.  But thinking and acting on a few basic decisions have me in much better position than before.  We have transitioned management at Mercer Capital. And we have transitioned substantial ownership, with the rest to be transfered over a few more years.

My challenge to you is to begin thinking about and working on your business end game.

My question for you is: Will you take the first concrete steps to begin working on your business end game?

In a coming post, I’ll outline what some of those steps might be in more detail than above.

In the meantime, be well!

Chris