An owner of a successful business, let’s call him Bill, reached me
in my office one day to let me know he wanted to retire. He told me that for
thirty three years he had managed every last detail of his business. He knew
every vendor, every manufacturer of materials, the names of every salesman that
was in and out of his shop. Bill had created an empire that he was very proud
of. The company was highly profitable and even had managed to buy the building
where the company was located. By now, Bill had forty seven employees. Some had
been with Bill since the company started in the rented space. The decision to
leave was very personal and emotional for Bill. These people were his family.

Bill and I met at his office. I was impressed with how each person
I met in the company was so cheerful and obviously happy to be there. Each one
teased Bill about retirement. They obviously cared for Bill and believed that
his departure was well deserved. I spent my first day listening and observing.
At dinner that night, Bill and his wife, Nancy, told me what they wanted to do
once Bill wasn’t leaving before 6 am and getting home at 8. They wanted to have
time to plant a garden, visit the grandkids, and have some time for the two of
them to do nothing if they wanted. After all, the last thirty three years, they
both had sacrificed a great deal.

I asked Bill what he wanted to do with his company. His two grown
sons had careers of their own, and were not interested in Bill’s line of work. For
his employees, he did not know of any of them who could run the show on their
own, much less have the money to buy the business and property. Bill decided he
wanted to sell the company. Ideally, he wanted to sell to a much younger
version of himself, someone who would work hard, appreciate his employees and
his reputation built on quality and service and continue the operation as if he
had never left. After dinner, the conversation continued at Bill and Nancy’s
home.

Nancy and Bill had a number in mind when it came to selling. They
told me that Carl, their accountant, had given them a “ballpark” figure for
what he thought the company would be worth. Bill had a slightly higher figure
that he thought was in order. We talked for another hour about the employees,
if Bill wanted to stay on, what terms he would consider, and what would be left
over after the sale. As I drove back to my hotel, I knew that for Bill and
Nancy, the immediate desire for retirement was still a ways away. I heard their
story many times before.

That night, I examined the business accounting and production
reports. I did a bit of research into companies similar to Bill’s in size and
revenue. Ironically, a company very close to Bill’s had sold about 200 miles
from him four months ago. The numbers were not in Bill’s favor. While printing
some information to discuss in the morning, I felt bad for Bill and Nancy.

Bill managed to build an enterprise around him. Along the way, his
advisors never spoke of building a company that could stand without him. His
company’s value was entirely based on Bill being there and continuing to
operate. Should Bill have decided to sell, the estimated value would have been
cut by more than 50%. It was unlikely that an individual would purchase from
him, but very likely a large international player would be interested. Many of
his loyal employees would be let go during the takeover. In the end, Bill could
not retire as he had planned.

Bill and I began working on reorganization of his company the
following week. We developed a plan to establish value based on the company
operating without Bill at the helm. Over the next two months, great progress
was made. It looked like within a year or two, Bill and Nancy could be much
closer to the retirement they wanted. Then Bill suffered a heart attack. With
Bill no longer able to work every day, the orders began to fall off. Seven
months after Bill’s illness, Nancy made the decision to close up shop. The
equipment and building was sold. Thirty three years of work and selfless
dedication was wiped out of the community and every employee gone.

Don’t wait to make plans for your successful departure from your
business. Creating an exit takes time. In my workshops, I tell owners to build
the exit from the beginning. What’s your plan for success?