Bo Burlingham, former executive editor for Inc. magazine and author of several books, including Finish Big: How Great Entrepreneurs Exit Their Companies on Top has shared that one of the key discoveries that led to that book. He found found that many business owners were unhappy after selling their companies regardless of how much someone got for their business.
Why were Sellers unhappy? Burlingham spent years interviewing former business owners to figure out why. His biggest conclusion: Business Owners did not find 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 lost as their phone isn’t ringing as much. They are not making the hard decisions anymore, and that is troubling for some.
Burlington describes these owners as “wandering the desert.” They’re searching for that new thing to get excited about….and sometimes it takes years to find it.
You might think a little wandering sounds fine, but beware! There’s actually research that shows early retirement can increase the likelihood of early death.
In 2019, 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.
However, Business Owners should not delay selling. Ironically, the best time to sell your company is when you’re engaged and truly excited about your business.
Buyers pay for the future cash flow of the business (based upon past performance) 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 phase in life, too. It’s important to know what you’re headed for, not only what you’re leaving behind.
When an entrepreneur’s identity is wholly tied up in their business, it is 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…and what you want to do! What captures your interest and enthusiasm, bother than 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 what you want to write for your Next Chapter.