Most spa owners don’t realize they need to start planning years before they may become ready to sell or hand off their business. And although a lot of that planning is to ensure they’ll have the money to meet their lifestyle goals, there are other equally important considerations.
Small business owners tend to pour their lives into their companies, and it doesn’t take long before their identity is entirely defined by their job. In order to achieve a successful afterlife, spa owners need to start laying the groundwork early for their emotional separation.
Crucial planning steps
Small business owners of any age can take these steps to begin preparing mentally for their future.
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Start now. You never know when you might receive an unsolicited purchase offer or what life events might rock your world. Most owners do not start thinking about transitioning out until some event gives them a jolt, such as a significant birthday, children graduating from college and starting their own families, or illness or injury.
Planning improves your chances for a successful outcome and gives you more control over the process. Owners sometimes don’t realize just how much their lives revolve around their businesses—or they do realize it and don’t want to think about it, because the future looks scary.
Planning ensures you still have a social life, a sense of accomplishment, challenges and the other intangibles that make you satisfied and gratified.
Identify what you want to get from the ownership transition. You’ll have both financial and nonfinancial goals and objectives. Financial goals may include receiving enough money to live on for the rest of your life, or creating a foundation to further a cause important to you. Nonfinancial goals may include regaining balance in your life and following a passion you gave up when you started your business.
Consider goals in every area of life, from health to family to social connections. This is about remembering your true passions, determining what’s most important to you, and deciding what you want to do when you can spend little or no time with your business.
This will re-energize you and provide you with direction as you figure out the best way to transition the ownership of your business, and minimize any chance of regrets.
Identify your fears, concerns and other barriers that prevent you from planning. Many spa owners fear what will come next and worry about losing their life’s purpose. Most wonder if they will have enough money to live the lifestyle they desire, and they’re concerned about their employees’ futures.
Hold a family meeting and discuss the future—identify your actual financial needs to find solutions and work through them.
Many owners who one day just decide they are tired of the headaches and are ready to relax sell their business or otherwise transition out, only to discover they are bored and unhappy without the business that has had a strong presence in their lives for such a long time.
After all of your years of work and sacrifice, you deserve a happy life after business. And it’s completely doable with planning.
Kathleen Richardson-Mauro has owned and operated five small companies and has successfully assisted more than 150 business owners in achieving their transition goals.
Jane M. Johnson started her career in public accounting and finance at General Electric, then established her own practice. In 2010, Jane received the Excellence in Exit Planning Achievement Award from Pinnacle Equity Solutions.