As we prepare for Thanksgiving this Thursday, our homes get a deep clean before family members from across the country descend on our front door. Our kitchens smell like rosemary, thyme, sage, and brown sugar-covered sweet potatoes. We spend 30 minutes explaining to our fathers the risk of deep frying a turkey, especially if it is still partially frozen.
As anyone who has cooked a Thanksgiving meal before will tell you, it is astounding that a meal that takes over 14 hours to prepare is gone within 20 minutes. It just does not seem right. You’ve spent countless hours ensuring every taste of your gourmet meal is prepared to perfection just for it to be eaten in the blink of an eye. Now what do you do? You spent the whole day crafting the perfect meal, and now it is just over?
Consider a business owner exiting their business. They have spent years working on and in the business, but the exit seems to go by in a flash. And then what do they do? How will they spend their life after they exit their business?
Written Plans for Life After Business
In the Minnesota State of Owner Readiness Survey, nearly 94% of business owner respondents said they at least had thought through and had an idea of what was next for them after selling or transitioning their company. 30% of respondents indicated they had a formal, written plan for their life post-exit.
Studying the 30% of 2023 Minnesota State of Owner Readiness Survey respondents who indicated they had formal, written plans they indicated there were eight areas of their plans. The top three most important areas considered by business owners in their written personal plans were written goals and objectives for their next phase of life, a formal personal readiness assessment, and an active and updated personal financial plan. Additionally, a written will and a written estate plan were also deemed important by these owner respondents.
69% of the respondents of the 2023 survey indicated they felt they were above average when asked how personally ready they considered themselves to transition away from their business. 18% indicated they were “completely ready” while conversely, 16% stated they were at risk and felt they were not ready personally to transition away from their business.
What To Do After Exiting Your Business
For many entrepreneurs, being a business owner is part of their identity. Many consider their business their life or at least a significant portion of it. Being an entrepreneur is not just a job, but a state of being. An effective exit plan incorporates your business financial needs as well as your personal and personal financial needs. Chris Snider writes in Walking To Destiny, “Many owners wander around for years, wondering what to do with their life. On the contrary, owners who have a written plan for what they want to do next and have taken the steps to position themselves have wonderful next acts.”
When the Minnesota State of Owner Readiness respondents were asked what they would do personally in their post-transition life the majority of the owners shared they would either invest in another business or buy another business. 65% of the surveyed owners stated they would invest in another business and 25% shared they would like to buy another business.
Additionally, 29% of owners shared they would spend their time focused on philanthropic endeavors. Charitable giving is a component of retirement planning and exit strategy that most owners agree is important. However, failing to properly plan for the amount you would like to set aside for charitable intent can cause rifts in your financial plan. Before exiting your company, consider what causes are important to you and your family. How would you like to support them?
Read the Minnesota State of Owner Readiness Report
See what other elements of owner readiness are evident in Minnesota in the 2023 Minnesota State of Owner Readiness Report. Request the Report through the form below!
