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How to retire from your own company

retirement_planEvery entrepreneur is a unique mixture of passion, vision, innovation, gambler, salesman, and dreamer. The mixture may vary from one entrepreneur to another, but the common bond they all share is being crazy enough to chase their dreams and test their abilities to lead others. The failure rate of start-up businesses is staggering, but the entrepreneurial warriors that do succeed get to live their dreams and become captains of their own ships for many years to come.

The problem for successful entrepreneurs is finding a way to retire from their own companies. Many have that, "I'll sell it and cash out one day," thought tucked way back in their brain. Others have children working in the company and think, "My kids will run the company when I retire.” Still others maintain that, "My employees will run and own the company one day," thought that allows them to fall asleep at night. These are all great thoughts, but in reality, most entrepreneurs are so caught up in running their companies that they do a pretty lousy job of building a solid exit strategy. Many just avoid it altogether.

So, for all of you entrepreneurs out there, here are some no-compromise thoughts on how to retire from your own company:

• Reality of different timelines: Companies live on for generations; leaders do not. Got that? What are you doing now - today - to ensure that your company will endure long after you sell it or retire? Too many owners run their companies as if they will live forever. The years fly by. The time to start planning your exit strategy is the day you start planning your business.
• Vision crossroad: A leader's vision is the company's vision. However, when the leader's personal vision shifts to retirement, there is an inherent danger that it can bring the company's vision along with it. Simply put, the company's vision becomes to retire its leader, and that's asking for trouble. The best strategy is to begin coaching your leadership team to create an updated company vision that embodies where THEY want to take the company. Letting go of the visionary role is tough for entrepreneurial leaders, but when approached with the right mindset, it is a very exciting and empowering process.
• Let go of the reins: Whether your intent is to sell or retire, you must let go of the reins and allow your leadership team to oversee operations and management. The intent is to make your company self-sufficient and self-sustaining. It's a process that takes years of coaching and mentoring to prepare your bench of leaders. It's much like teaching a child to ride a bike: you begin with training wheels to instill confidence, then you remove the training wheels and hold on to the seat as they pedal away. When you quietly let go … they’re cycling on their own. A self-sustaining company is more attractive to a buyer - and fetches a higher selling price. Or, it simply sustains your income in retirement.
• Financials: If you had to slide your company’s financials across the table to a potential buyer, what story would they tell? Would it be the story of a healthy company that manages cash and expenses, contains liabilities, and drives profit? Or would it be the story of a company that is cash-strapped, burdened with debt, undisciplined, and racking up losses? If you're not proud to slide your financials across the table to a potential buyer right now, it's time to get into the Strategies coaching program. I'm serious, because ugly financials means there is a lot stuff that needs to be addressed - beginning with leadership. You can't sell or retire with ugly financials. Got it?
• Pick your exit door: Do you want to sell your company, or transition the leadership? Either way, you must decide how you want to exit your business and begin preparing for that day - even if it's ten or twenty years from now. If selling is the exit door you want to go through, then start looking at your company as an asset and make it shine in its culture, financial reports, and how it operates. If you choose succession to family members or employees, you must do the same as selling, but with extreme emphasis and clarity on what the company will look like after you step down. This can be quite complicated and requires outside coaching and guidance.

The last thing you want to become is the elephant in your company's living room. Your retirement is a natural progression. If you want to reap the financial rewards of building an enduring company, begin planning your exit strategy now. No compromise.

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