Intentional Growth 3 Things in a Great Business Exit
What does a great exit look like? How do you accomplish one? Geoff Green is on the show today who is the author of The Smart Business Exit. Geoff started off his career as an M&A attorney and has been a business advisor, value building advisor, and exit strategist for over 30 years. We talk about the different variables needed to build a sustainable business that is highly transferrable and valuable. Geoff explains how navigate all the variables that go into accomplishing a great exit that includes being happy in your life after business.
You Will Learn About:
- Geoff’s journey from an M&A lawyer to a business and exit advisor
- What is involved in a great exit
- How to take control as the business owner over the process of who you sell to and when you choose to sell
- Putting yourself in a good position emotionally to be happy post-sale and down the road
- The importance of starting or thinking about having a community outside your business
- The “uncomfortable truths” about your business
- What type of business owner you are
- Focusing on building a highly sellable business
- Getting into the mindset of thinking like a buyer and looking at your business differently
- Working out your renewed purpose
In this podcast, Geoff Green talks about the absolute necessity of planning for your life after business — which could not be more perfect for this show. He spent ample time as a corporate lawyer and learned all about the inner workings of a deal. However, he noticed a distinct lack of planning for what happens after the exit… and that this was creating an undue amount of stress on business owners.
When someone asks you “What are you going to do after you sell your business?” Do you have an answer ready? Do you feel happy and excited to exit your business? Well, you’re not alone if you answered negatively to both of those questions and felt a smidge of panic.
Preparing for the Inevitable
You’re going to exit your business some day or another, so why aren’t you preparing now? Time after time, we’re told to prepare early for the sale of our business so we don’t get nasty surprises during due diligence or negotiations. However, rarely are you asked, as an entrepreneur, “Have you planned for life after your business?”
This is why I created this podcast, and why I’m grateful to host people like Geoff who truly understand the importance of thinking about what comes next.
Since we know that we are going to have to leave our business eventually — and yes, maybe ‘over your dead body’ but one day even that will happen! — we need to embrace the planning process. You can even treat it like a business plan: what are your needs, what goals can you set to attain those needs, what action plans can you put in place to achieve those goals and what type of framework do you need to ensure your action plans are successful?
The Uncomfortable Truth
To borrow from Geoff’s book, The Smart Business Exit: Getting Rewarded for Your Blood, Sweat and Tears, you need to face some uncomfortable truths about exiting your business. The reality is that most of us have built up our businesses so well that they’ve enveloped our lives — and we like it that way! We like coming into the office and being a mover and shaker; we like knowing our employees, suppliers and customers well enough to socialize with them outside of work; we enjoy our business trips away with those same people because they’re just plain old fun to be around; and we really enjoy having this entity which, in many cases, defines us and gives value to our existence.
However, when was the last time you stopped to think about why you started your business? Because I can guarantee you it wasn’t for the above reasons. Those are just perks that have come along with the hard work and relationship building that goes with building a business from the ground up.
So, if you’re being honest with yourself, why do you get sweaty palms when you think about exiting your business? Chances are it’s because you realize everything you’re leaving behind. You don’t really have an action plan for what comes next and you’re leaving behind your entire community when you sell your business.
This is where the planning process begins: accepting the fact that your relationships have to change and that you will need to put in the work to build your life after business, just like you did when you started out with your company all those years ago.
Next Steps
There is no quick fix for creating a life after business for yourself. Think back to the basics, however, and you’ll naturally start generating an action plan for yourself. Obviously you need to ensure you get enough money out of the deal to ensure your financial well-being (whether you’re retiring or looking for the next great adventure); you need to consider what you’re going to do with all your free time now that you can do anything you want; and you really should look at your social network and relationships — are they as strong as you want them to be with the people who matter to you most?
Looking at the financial side can be complicated, but is very doable if you reach out to the right financial planner. You’ll need to know if you plan to invest in another business or retire to cruise the coast of Monaco, but once you have a rough idea of how the next 30 years will go, you can start in on the financials. Remember, you now have to pay for all those owner’s perks (like those great ‘business’ ski trips!) which right now are absorbed by the business. Be honest about your spending.
That brings us to our second concept: free time.
What a novelty! You no longer have to be at the office by eight. You can do anything you want… provided you’ve planned the capital for it. What if you want to invest in another business or start a new one? Good for you! You have the time to do that now. Maybe that’s where your passion lies. However, if you’re ready for a break and want to enjoy the art of doing nothing, maybe it’s time to set more challenging goals like getting that eagle on the 7th hole. You have the opportunity now to think about what you truly enjoy doing and invest the only finite resource we all hold in equal measure: time.
The last key factor to consider before you head off in the sunset is community. This is a huge change for most of us. We’ve made good friends with our supplier of 20 years and all of our employees who helped us achieve our dreams. While you don’t have to leave them all behind, you will need to find new things to talk about now that you no longer share the topic of the business. Think about the conversations you have with these people regularly: you’ll find the vast majority of what you talk about revolves around work (perhaps rightly so!). So if you do want to maintain these relationships, you’re going to have to find new common ground.
However, there are tons of ways to meet new people and develop new social circles — some of which will include your new hobbies — so have some patience with yourself if you find you’re getting bored by ten o’clock and reaching for the phone just to ‘check in’ at the office and see what’s going on.
So don’t be one of those business owners who is master of all but his or her future: plan for what comes next as effectively as you plan in your business and your exit will be the start of your next big thing, no matter what it is!
Takeaways:
- Variable one of a great exit is freedom. Freedom is why we start our businesses, why entrepreneurs take the risk. Freedom comes in a couple different forms. One is financial freedom which includes being financially rewarded for all the blood, sweat and tears you put into your business. The other is freedom of time to do whatever you want when you want. There is also the freedom to surround yourself with the people you want to hang out with. All in all, it is the freedom to paint your own picture of what your life looks like after the sale.
- Variable two to accomplish a great exit is having a legacy. What is the legacy you want to pass on? What is it that you want to be remembered for after the sale of your company? This could be passing it down to your kids or making a mark in your community. It is up to you to decide.
- Variable three is your renewed purpose. What is next? What is your new purpose? Are you going to start a new company, consult other owners, or do something completely different? Your new purpose will make you happy and allow you to explore and grow as an individual post-sale.
Links and Resources:
Solidity Financial
Geoff Green on LinkedIn
GRG Momentum
The Smart Business Exit website
Buy The Smart Business Exit by Geoff Green on Amazon
Finish Big by Bo Burlingham
Built to Sell by John Warrillow
About Geoff Green:
For over 30 years Geoff Green has been helping business owners not only build great businesses, but also get rewarded for their blood, sweat and tears when they exit.
Geoff has always been fascinated by innovation and strongly believes it’s the key to Australia’s future success as a nation.
He was introduced to the heady mix of innovation, entrepreneurs and high growth businesses early in his career. Upon leaving law school Geoff joined a dynamic, fast-growing corporate law firm which evolved into Minter Ellison, now one of Australia’s largest rms. He was quickly captivated by the cut and thrust of mergers and acquisitions, stock exchange listings and the adrenalin rush of big business deals.
He also soon realized the businesses he really liked working with were the entrepreneurial ones. Those owned by energetic and passionate entrepreneurs who were striving to achieve significant goals in their own business, as well as often making a real difference in the world.
In 1998, after 15 years as a corporate lawyer, Geoff founded GRG Momentum, which quickly evolved into one of Australia’s first business advisory firms specializing in business exits.
Working side by side leading entrepreneurs as they created real value in their businesses and then successfully exited them, Geoff learnt the key business exit strategies he has used for many years with his own clients.
He also began to see two clear patterns with business exits. Firstly, most business owners, despite the huge sacrifices they made and risks they took, didn’t get well rewarded for their blood, sweat and tears on exit. Secondly, there were a small handful of business owners who did manage to sell their businesses for huge amounts, often for reasons that weren’t clear to anyone.
A key step in Geoff’s lifelong fascination with innovation, high growth businesses and high value business exits was his first- hand experience with BSX (an alternative stock exchange he co-founded with Bendigo Bank and Computershare). BSX was established as a start-up business and sold within 5 years to NSX for $7.75 million, providing Geoff with unique insights into creating and exiting a high value business.
Geoff has always been frustrated that most business owners don’t achieve good exit results when the time comes to move on from their business.
For years business owners work hard, take risks, employ people, build great products and services and contribute to their communities. Private businesses also drive the development and commercialization of many of the innovative new products that enrich and improve our lives, families and communities. Geoff strongly believes that when the time comes time to exit business owners should be properly rewarded for their blood, sweat and tears.
To help his clients, and business owners generally, Geoff released his first book, The Smart Business Exit: Getting Rewarded for your Blood, Sweat and Tears, in late 2014. Importantly, he wrote it specifically for business owners, not just their advisers. It’s packed full of useful information, case studies, stories and practical exercises and is one of only a few Australian books on business exits. The Smart Business Exit has been widely acclaimed and already provided invaluable assistance to many business owners exiting their businesses. It’s also the rst Australian business book to highlight the implications of the impending “business exit tsunami” as our baby boomer business owners head towards retirement.
Following the success of The Smart Business Exit, Geoff decided to launch The Smart Business Exit hub to provide business owners and their advisers with easy online access to information about business exits and practical checklists, tools and programs to help them achieve a successful business exit. It’s fast becoming Australia’s “go to” website for business owners looking to exit their business.
Geoff is regarded as one of Australia’s leading business exit strategists and thought leaders. His peers include highly acclaimed business exit authors and entrepreneurs such as John Warrillow and Dr Tom McKaskill. He is also a member of the international advisory board of The Value Builder System, a North American group developing one of the world’s largest and fastest growing networks of business exit advisers.
Geoff provides strategic guidance to a number of private businesses in his roles as director and advisory board member. He is also a regular contributor to mainstream and online media, a popular guest on business webinars and podcasts and a highly engaging speaker on high growth business strategies and pro table business exits. When not working with entrepreneurs and strategizing about high value business exits, Geoff enjoys running, trekking (including Everest Base Camp in 2012), good wine and spending time with family and friends.