Exit Planning by Default

My father was sixty-seven years old that bright August day in 1984 when he went out on his office patio at work to look at the flowers.  Suddenly he felt numb on his right side, his arm, his face and leg all stopped working in coordination with his body. He went to sit on a patio chair and nearly fell into it.  His vocal cords were also impacted by this stroke, he could not yell for help.  Slowly his mind began to search for what this would mean to him, his family, his career and his business.

When he arrived by ambulance at the nearby hospital he was wheeled into the ER. Immediately he was surrounded by medical staff adding lines in his veins and hooking up monitors for his blood pressure and heart rate.  Quickly the attending physician walked in, greeted him as Mr. Odom and asked what my father’s occupation was during his career.

Through slow and painful speech he said “That is Dr. Odom, I AM a dentist”. The good doctor asked when he stopped practicing dentistry.  My dad told him “About 10:25 this morning”. The ER physician looked straight into my father’s eyes and said, “At your age, you should be retired!”

Exit planning at age 67 does not usually include a side trip to the ER room with a loss of mobility, speech and an increasing fear that life as you know it, is over! This is not the planned exit of turning your business over to the chosen successor and taking some time to enjoy the good life.

Dad had his first heart attack at age 45 when I was just a kid of 5 years old.  Now as I had begun the professional relationship of being the CPA for my father’s business, he was lying in a hospital again. This time he was wondering if his days as a respected dentist, business leader and mentor were over.

Weeks later he was released from the hospital and slowly and fully recovered from his stroke.  The next conversation we had was about beginning a plan to find a successor for his dental practice.  Enough talk about retirement, now it was time to get on with a plan!

A few years later I had a dental client who bought a practice from the estate of a dentist, whose life did not survive his Exit Plan.  The successor dentist bought the practice for a fraction of the price negotiated earlier, prior to the sudden death of the selling practitioner. The former dentist waited too long to plan his exit and it cost him his life and his heirs several hundred thousand dollars.

These were some of the earliest experiences that I had with Exit planning and execution.  The hard lesson of seeing my father nearly die from a stroke working late into his sixties ended with a bit of luck and answered prayers.

We engaged a dental practice transition firm to let recent graduates from the UW dental school know that my father was looking to sell his practice.  After interviewing several candidates Dad selected a successor dentist and the transition went smoothly. The practice sales price received was within the industry range and he began to dream about playing more golf and enjoying his retirement. He lived to be 83 and found many enjoyable days when he was no longer working.

Too many business owners delay the planning for their Exit, until their options evaporate or their health gets the best of them. Don’t make the same mistake!  Finding your Exit is something to work at so that you can exit on your terms….not on the terms of others.

Planning the Exit from your business can take years of preparation, consideration of the options between internal and external transfers, building the value to meet your retirement needs and selecting the option that aligns with your personal goals.

There are cycles in our economy that over the past several decades have shown there are optimal times to Exit and times to hold fast. Planning your exit and execution of the plan at the right time can maximize your options and reward. Don’t fail to plan or you will plan to fail.

As a B2B CFO® partner I work with business owners to improve operations of their business for optimal value and cash flow.  I also work with business owners to assist and coach them in planning their Exit on terms that align with their mental and financial readiness and to select an option that will fulfill their goals.

 Let me know if you wish to start the discussion. Because finding your Exit is not something you should leave to a stroke or a stroke of luck!