Knowing when to call it a day

Some do it early.

‘I’ve sold my business’, your business pal blurts out over an early morning coffee. ‘What?’ You didn’t even know they were contemplating selling up, let alone having the deal all done. Signed, sealed and delivered. How did that happen?

Your pal is in their early fifties. This is something that they have been thinking about for a long time apparently. The proceeds from the sale will give them a comfortable retirement. After a short ‘Earn out’ period where they work in the business to hand over to the new owners they will leave, hopefully to enjoy the rest of their lives.

The chat leaves you a bit unsettled. You don’t have a plan. You’re a business owner like your friend and a few years older. From time to time, usually when going through a difficult period at work, you think about slowing down and doing less. Then things pick up again, you get stuck in and the cycle continues. You need the money. You have your old employment pension which will start to pay out soon but there’s still the mortgage to pay off and savings are minimal.

So it feels like carrying on is the only option.

Some entrepreneurs do that. Literally keep going until they drop or ill health forces retirement upon them. The smarter ones have at least put some plans and an infrastructure in place so that the business can continue without them.

There is a saying that a business owner should start to think about their exit on the day that they start.

Essentially an orderly exit breaks down to a few choices:

• Business sale with the owner leaving immediately or after a period of time
• Partial sale or merger with the owner retaining a stake in the business and some ongoing involvement and income
• Retaining full ownership but with gradual handover to a new management team

Exiting well takes time to plan and implement. Those plans may change over time as the owner’s circumstances and aspirations change. 

We may not all be as organised and decisive as our fifty-something retiree at the start of this blog. But a little thought and planning in advance might help us get closer to the retirement we want.

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Ex businessman with ideas to 'Make America great again'

Here are some ideas from an ex businessman on how to ‘Make America Great Again’;

• Low business taxes
• Get other countries to share the burden of American defence spending
• Reorganise and lower the cost of Medical Insurance
• Level the playing field in international trade
• Invest in infrastructure projects

Sound familiar?

Leaving the 'wall' and immigration controls aside, it could be lifted straight from Donald Trump’s manifesto. These in fact are all ideas espoused by Lee Iacocca, then President of Chrysler in the 1980s.

I’ve just finished reading Lee’s autobiography, the modestly titled ‘Iacocca’, written more than 30 years ago. It charts his rise to be number 2 at Ford and his fractious relationship with Henry Ford II.

He was eventually unceremoniously sacked when Henry decided they could no longer work together. Within weeks he was recruited to run the ailing Chrysler business. He quickly found this was a poisoned chalice with the financial situation much worse than he had imagined. With guts, drive and sheer force of personality he managed to achieve ‘equality of sacrifice’ with management, workers, suppliers and banks all tightening their belts. With the help of a hard-won government loan guarantee he managed to turn the company around, paying off the loans early and restoring profitability.

Lee was an engineer by training and a marketeer by inclination. The son of Italian immigrants he believed in the virtues of education, hard work and ‘doing’ rather than just thinking. His politics may sound conservative but he was much more nuanced than that. If anything he leaned more to the left politically and was supportive of targeted government support for industry if it was in the national interest. He was also a strong believer in balancing the books and concerted effort to reduce the national deficit.

One of the final chapters of the book is entitled, ‘Making America great again’. In his heyday Lee was seen by some as a potential future president. Politics wasn’t for him though. He preferred the cut and thrust of business and being able to make and implement decisions quickly.

Another ex businessman is now shaking things up at the White House and at least some of his ideas bear a striking similarity to those of his older contemporary.

www.base52.co.uk