Who Will Fill Your Shoes?
I am always thinking about the future. So much so, that my wife is constantly telling me, “just focus on the here and now.” There is truth in that, but I really like thinking about the future and how I might shape it to suit my hopes and dreams. I guess you could say, “Visioning,” is my hobby. For my business, however, I know it has to be more than a hobby to achieve success. For certain, in business, you must either think about (and plan for) the future or be run over by it.
So, at age 51, am I thinking about retirement? No way! I’m thinking about how I could do lots of other cool things in the future. Like, finish my quest to run a marathon in all 50 states! I’m thinking about creating a life that doesn’t involve the grind that I have dealt with for over 30 years. I am thinking about an exit strategy. (That’s not my death, by the way. If that happens I have a lot of life insurance, my wife will be free of financial worry, and I won’t need to care anymore). It’s an exit strategy from my business.
The issue here is that I will probably live another 35 years and the next 20 -25 will hopefully be action-packed! So, the question is — who is gonna take over or buy my company? What will I get as my reward for building such a fine company? I definitely want something for all this hard work and long hours. Here are some of my thoughts I have while practicing my hobby, and, “visioning,” who will fill my shoes.
The first, and most likely, the scenario would be my management team, either an individual or the group together. Most of them already own a small share in the company. The group includes 5 guys, ranging from 5-12 years younger than me. They are great guys who have been with me a long time. The plan would be to continue to build cash reserves in the business and take a nice chunk as a buy-out when I leave. Additionally, I would be paid some negotiated amount over the following few years in return for some small participation in the company. To make it successful, I will probably need to choose from amongst them a leader and cultivate and coach that person as a successor.
Another scenario includes my kids. One of them might consider a deal like the one above. Sounds nice, but they have told me that they don’t plan on working as hard as I have over the years. I can’t say I blame them. I haven’t taken much vacation time, and I’ve worked ridiculous hours. At their young age I don’t think I will mention it to them again for a few years.
A third scenario is an outside buyer. This option might include a group of investors, another painting company, or potentially a large corporate investor, such as a Home Depot or Sherwin-Williams type. For this to happen profitably, several things need to happen. Namely, over the next few years, I will need to focus on getting the numbers to look really good. I will then need to convince the buyer that the business doesn’t need me to succeed. I don’t sell that many paint jobs and I don’t run operations, so they don’t really need me. My business doesn’t need me. What an interesting thought.
A final scenario would be to start semi-retirement now. I start working regular hours and taking more time off. I am an old man and I don’t have to prove I am the hardest worker anymore. I once heard a quote that appeals to my nature, “true success is semi-retirement.” No surprise, really, as my Dad said it. My dad worked as a lawyer well into his 70’s. He gradually cut back while my brother Michael gradually took over his firm. I just don’t know if I want to do this another 20 plus years and go through another couple of boom-bust cycles.
With so many positive scenarios, the one that really becomes the least appealing is dropping dead and not enjoying any of the fruits of my labor. Such as working ‘til the bitter end and just closing the doors. That is NOT gonna happen! As a result, I will think about the future and plan for it. I will think about what I want to do for the rest of my life. I will think about who might become my handpicked successor. I will think about how to create value in my business that someone else will want to pay for. In the process, I will secure a comfortable future of my own design. Have you thought about who will fill your shoes?
Ok, back to the here and now. I have a ton of phone calls to return.
All the best,