Late last year I facilitated a group of interior designers who were 60+ years old and wanted to develop “exit strategies.”
These days, I can’t help but wonder with all of the uncertainty caused by the coronavirus if even more designers (and owners of any type of business) aren’t harboring similar thoughts. Maybe they envision some sort of simpler life, perhaps retiring to a more reclusive lifestyle, or what I have termed as the “luxury of solitude.”
Spoiler alert: what I discovered when working with this group of six was that none of them really wanted to get out, no matter what they said. As soon as I started describing steps they could take, the objections started flying:
- But I want to stay involved in the industry, you know, with sort of an emeritus status;
- But I want to still be able to cherry pick great jobs from time to time;
- But I still want to be able to come into the office every now and then
- But I still want to attend all the cool trade shows and serve on committees
- But I still want to receive enough income to maintain my current lifestyle
In other words, they didn’t want out at all, they wanted something else entirely. Most likely, they wanted to stop dealing with the details, the problems, the responsibilities, the logistics, the software and systems. They imagined someone managing everything (except for final design selections, of course!) while they floated above the fray, still earning a full income and parachuting in on the best projects just in time to apply finishing touches and receive the praise.
The more objective ways to exit, of course, are to either turn out the lights and leave, or sell to someone else. The latter outcome is rare, but can be done. The most likely scenarios are to sell to a competitive firm, or to an employee that you have groomed and/or recruited expressly for that purpose. I have also worked with clients to sell to a larger firm, such as an architectural firm that wants to bring design services in house.
I’ve written at length about how to wind down a firm, maximizing cash flow and scaling down projects with a horizon of, say, 3-5 years.
However you exit, it will take years to plan it well. I used to give seminars all over the country teaching business owners how to value and sell their companies. One of the jokes I was trained by the company to use was to ask the business owners how they planned to leave their businesses, and then add: “Horizontally?”
I’m going to develop a course on “Getting Out” in 2021 and much of it will be about how to phase out, more than how to get out. That’s a much more realistic strategy for riding off into the sunset.