IF IN THE FUTURE… THEN WHY NOT NOW?

Questions, not Recommendations

His financial advisor had arranged for him to interview a business coach.? Having just turned 62, Clark realized that the quality of his retirement depended very much on the sale price he garnered on his insurance brokerage.? He and his wife always contributed a portion of annual compensation to the accounts the financial advisor managed.? However, their ability to purchase a large Florida home in a gated community, as well as finally travel to all the places they had envisioned, required achieving the upper end of the price range in the latest business valuation.? He also knew from his own investigation that preparing a company for sale was typically a process requiring several years.? When Clark initially balked at the fees of the business coach, his financial advisor was quick to suggest that a few more millions of dollars in the sale price were worth the investment of some tens of thousands.

After eight weeks of meetings with the coach as well as several days of the coach quietly observing operations, they scheduled a meeting to discuss an action plan toward readying the business for sale.? Clark expected to discuss a detailed list of recommendations prepared by the coach, the deliverable of the consulting fees investment.? The conversation was quite different.

“First, I agree with your earlier assessment that there is not likely an employee or a group of employees that could afford to buy you out and successfully run the company,” the coach began.? “You also appear to be correct that a sale to a larger firm or to an individual with extensive experience in your industry are the two most likely scenarios.? In those cases, what actions might you expect the new owner to undertake in the first two years after buying your firm?? Stated a slightly different way, if you were buying this firm without any prior relationships, what would you do?”

“Well, Abby would be gone in week one,” Clark quipped.? This was obviously a question he had previously considered.? “She was a great employee over the years, but she is no longer accurate in her data entry.? She knows she’ll receive no more raises, but is terrified of losing this job, being too old to find another position, and being home alone day-in-and-day-out.”

As the conversation continued about what a future owner should do, Clark offered other observations about staff, particularly those who continued to resist his efforts to return them to the office full time, or he had reluctantly agreed to cut to 30 hours a week, just enough hours so they were still be covered by health insurance and other benefits.? When asked about how he thought his staff will react to the changes he thought were prudent to impose, he replied just as quickly, “They have to expect the new owner to make as many cuts as possible to increase profit to cover the exorbitant price he paid me for the firm.”

This was said half in jest, but Clark did not miss the coach’s direction from these questions.? The two then discussed various questionable existing products lines and services, as well as new ones that Clark’s competitors were now offering but he was reluctant to introduce due to the long runway to profitability passed his target sale-to-retirement date.? By the end of the meeting, Clark had written out all the actions he should be taking to prepare the business for sale and beyond.? He also agreed that some of the actions that result in staff cuts or unpopular changes in work conditions might be done with more empathy by him than the future owner.? He should implement the hard decisions rather than leave these to the next firm president.

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Integrating Retirement with Work

At their next meeting a month later, the coach introduced the concept of an “accountability session.”? He explained that he employed this approach with CEOs who were firm owners and not really accountable to a majority of shareholders or a board of directors.? Clark could choose to do or not do those tough changes, especially if they became less potentially profitable than he thought.? Still, pledging to do these actions and later reporting on his progress to the coach added a sense of accountability.? After that session ended, the coach had another question, “What have you been putting off until retirement that you can begin to do now, even before the sale?”

Clark’s meandering answer was summed up by the coach as:? Spend some time each winter renting a condo in Florida and experiencing at least one overseas two week trip a year.? For other opportunities, Clark demurred that these need to be worked out with his wife with whom he very much looked forward to sharing those retirement years.? He also understood the coach’s implied caution that fate might not give his wife and him as many years of retirement together that they had anticipated.? He had already lost a few friends to early deaths.

When the couple finally had a chance on the weekend to discuss what post-retirement plans they could initiate now, they first discovered they were not fully aligned.? His wife very much looked forward to spending winters in warmer weather, but was not quite settled on Florida.? A stay there this winter might address her concerns or even change his mind.? Perhaps commit to short term rentals each of the next few years at other southern retirement communities that met their requirements for amenities and opportunities.? As they concluded the discussion, Clark realized that hiring a business coach was their first significant step toward their retirement.

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Why Wait Until the Unimaginable?

This conversation continued, often augmented by sharing links to websites about retirement communities and intriguing foreign trips.? Then Clark’s sister-in-law unexpectedly passed away at 71 years old.? Once the funeral process was completed and Clark and his wife had a chance to reflect on the sudden horror, she asked him a question she’d never raised before, “What would you do if I suddenly died?”

He knew she was very serious in her inquiry, and truthfully, he had occasionally wondered about that contingency plan in the way he always developed multiple contingency plans as he had grown his business.? Clark was planner.? Setting aside for now questions about dating and seeking another spouse, they each confessed that there were things that they did now or possessions they had they would immediately divest.? She had no love for his two-seater convertible, but tolerated their summer weekend drives in it.? He was not that enamored with their large six bedroom colonial house, which they no longer needed now that their children had all married and lived just a few hours away, and whose exterior and landscaping were an ever increasing maintenance burden.? Not surprisingly, there were items and activities that each had accommodated supposedly in deference the other, that neither really liked.

Clark reported this unexpected finding to the business coach at their meeting the following month.? The coach smiled, and suggested that Clark’s reluctance to confront needed changes in his business was very similar to his reluctance to propose changes in his married life.? Maybe some of those changes could be made now.? “Why wait until one of you dies?” the coach challenged.

Ultimately, Clark was unsuccessful in convincing his wife to move to a smaller and easier-to-maintain residence, conceding that it might cost more to purchase and redecorate than what they would receive from selling their home.? They now seriously reconsidered all the home finish refreshes and update renovations they would joke about waiting to do when it was time to sell the house.? Why wait until they were ready to relocate, why not enjoy these improvements now?? They also embarked on a decluttering program, using as a criterion to dispose of anything they would not take along in a move if they actually downsized their residence.

As to the business, once Clark started making those changes he expected a buyer to make, he started enjoying running his business more.? He adjusted the sale price he had been setting, partly because the changes he was instituting were increasing profitability, and partly because he realized he wasn’t feeling so anxious to sell.? That greater contentment was in turn due to his taking more time off from the office during a month or two down south (he still telecommuted daily) and in traveling on some exotic trips he was unsure they would physically be able to undertake 10 years from now.? And his longtime employee Abby was happy to have her position terminated, having worried that her request for departure would “let the team down.”