What am I, if not my Business ?

[Koogie]

"What Am I, If Not My Business?"


Interesting little article from Inc. that might be of use to those of us with our own businesses or trying to rid ourselves of our businesses !

I don't particularly care for the type of people they feature in the article (they are definitely of a certain "sort") but the issues raised are valid enough.

Anyone else in this boat ?

 

[Nords]

Anyone else in this boat ?

There may be one or two who come to mind, but most people don't get to this board via that path.

At first I had a hard time building up any sympathy for the stories of multi-million $$ exits, but by the end of the article I was sorry to see how little they'd developed as human beings-- until getting out of the business forced them to confront their own personalities.

 

[Koogie]

I agree, as I said in my statement, I didn't really care for their "sort" ie: arrogant Type A people who's idea of self improvement doesn't extend beyond their golf swing and are bitterly disappointed when they no longer have minions to push around and fawn over them.
BUT, sorry, what "path" ? Owning your own business ? I can't think that's what you meant at all.....

 

[Westernskies]

I agree, as I said in my statement, I didn't really care for their "sort" ie: arrogant Type A people who's idea of self improvement doesn't extend beyond their golf swing and are bitterly disappointed when they no longer have minions to push around and fawn over them.

A bit stereotypical, don't you think?

(BTW, I don't golf or own my own business ), but I do understand the concept of those who put so much of themselves into their work that they discovered it was what defined them. It isn't always about 'having minions to push around and fawn over them." There are many small business owners who worked hard and built very successful companies, and have passed them down to their family memebers- I know that would be a very good feeling, seeing the next generation building on a solid foundation I put in place through hard work and self-sacrifice. YMMV

 

[Koogie]

Well, I do happen to own my own business and I can assure you, as Nords has said, these are not the sort of people to feel a lot of empathy for. Stereotypical ? Probably.
But this stereotype has a lot of truth to it... )

And yes, the concept of the article, and hence my putting it out there, is for people who may be going through this, as I am. Running a business takes up a large portion of your life. It's the demanding child that can never be satisfied ! So what happens when you finally sell out ? If you're not lucky enough to have found any passions in life, you can be left floundering for a long time. That is true for retiring early as well.

The soft questions like this are uncomfortable but can be as meaningful or dangerous as any shortcoming in your firecalc numbers.

 

[ziggy29]

Funny, I've always found the self-made successful entrepreneurs to be the opposite of "arrogant" people who seem out of touch and self-absorbed.

Because they made it themselves, more than likely from more modest beginnings, they likely remember what life was like before they "made it" and so can relate to the rest of us. Contrast that with descendants of "old money" who were very wealthy on the day they were born. They are the ones, in my experience, who are more likely to become the folks who were born on third base and act like they hit a triple to get there. (But even that is a stereotype and we're being unfair if we don't give the individual a chance to prove otherwise before judging them.)

 

[Nords]

BUT, sorry, what "path" ? Owning your own business ? I can't think that's what you meant at all.....

There are many paths to ER, but the vast majority of this board's members achieved ER through LBYM and sustained superior savings into cheap tax-efficient mutual funds. Mostly people chasing paychecks with perhaps a few getting a bit of equity from their employer.

Landlords aside, I can only think of a few posters off who owned their own businesses. (Business owners who are enjoying themselves would be unlikely to post here.) Very few (if any) brilliant investors here, since those types tend not to ER either. Over 60 military active duty, Reservists, and veterans here... but they tend not to ER either, and we got a whole book out of that question.

I can't remember if we've ever run a poll on how people achieved their ER. Of course you could design one of your own.

 

[Koogie]

Well, they may not necessarily be getting to ER by the "pure" method of being a wage earner and LBYM that seems to be favoured here but I can assure you that a lot of the small business owners I know are dreaming of ER too. (and the smart ones are also LBYM).
And, hopefully, the article was of use to the few other "oddities" like me that are on this board and own their own business.

And a poll ? Yes, that would be interesting.

 

[Onward]

My two closest friends both own successful small businesses ($1-5m in sales). Both guys dream of ER constantly, and desperately need ER, since their businesses are killing them. Both are younger than I, yet both look older. But neither one of them is practicing LBYM.

Another interesting thing they have in common is that both have a herd of people (adult kids, uncles, friends, friends of adult kids) who have attached themselves leech-like to these two business owners, and continually draw monetary assistance. My friends are either very generous or very stupid. Probably both.

 

[Ronstar]

I'm kind of in this boat - but where the people in the Inc article are in yachts, I'm in a dinghy.

I'm a 55 yo 12% owner of a company where none of the partners will buy my share, because the company can not (or will not) find someone to replace me. They feel that the co would lose clients and revenue if I wasn't there. So I try to work as little as possible - satisfying only a few clients.

Exiting such a situation can be difficult. I want to retire, but I can't just walk out the door and let my investment in the co dwindle. The only solution I can think of now is retire but agree to a consulting gig where I stay on for a few years. Unlike those in the article, I do not see myself longing for entrepreneurship once I exit.

 

[Grizz]

Many thanks for posting that article. Wow, did that hit home. I've never read anything nearly so relevant to my situation.

I've had what you'd call exceptionally fortunate timing in that I was an employee who along with another employee purchased a good little company when the owner decided to retire. We service mostly the oil and gas sector in Western Canada and while the industry was shaky when we bought in 1999, it went sort of crazy shortly after. Somehow we weren't even affected much by the recent global economic turmoil, continued growth through it, and are currently busier than we've ever been.

We worked our butts off paying off our initial debt then started building the business according to revenues. We'd done very well and had the opportunity to sell the business in '08. I was 39 and the payout would have easily been enough to be FIRED. That's how I found this forum, and while it has been helpful on many fronts, Nords is right, most got to FIRE by a different path and probably can't completely relate to my situation. I'll bet many would say something like "boo-hoo, you're 39 with a big pile of money, suck it up!". I know I would have said it when I was an employee.

After about 6 months of dealing (accountants, lawyers, due diligence) the whole thing was getting to me. I had what I suppose could be called low grade panic attacks thinking about how to "reinvent" myself. After all, once the company is sold, that's it, my business, the name, and the equipment is gone and I'm done. I couldn't even work in the same industry since I had to sign a 3 yr non-compete. Even if I did wait it out, in 3 yrs I'd be "out of the loop" in the industry. I also pondered whether I would be a good employee.

In dealing with it there were sometimes days on end of elation where I'd bask in the knowledge that financially my wife and I were set for life. Then there were the cold sweats at night, insomnia, stomach aches, and nervousness at the thoughts "hey, I'm only 39, this might just be some kind of mid life crisis that I'm having and I'll totally regret this move in 6 months", or "This is a great company and a great job, with employees that I admire and who are my friends", and we can't forget the ever popular "What will I do all day?"

Thankfully the deal fell through as the potential purchaser got cold feet as he was seeing oil and gas prices dropping as we neared completing the sale.

Since then we've realized how critically important an exit strategy is. We've decided to bring in a fellow with strong industry experience who we hope will gradually take over management, thereby allowing my partner and I to slowly fade into the woodwork.

 

[Koogie]

I'm glad to see it did speak to some of us. As I stated elsewhere, I'm dealing with a lot of these issues right now as well. Owning a business sneaks into every facet of your life and disentangling it from the other parts of your life can be very painful.

Glad to hear it is turning out well for you. Mine is more likely to be a messy little sale at the end of this year, which will please no-one but will get the job done. I don't enjoy the industry I'm in much anymore (increasing goverment regulation/competition/price pressure) so I'm to the point where I'm going to work hard on the deals that are on the table and see what happens.

Out of curiosity, was your proposed sale going to be a share sale ? If so, did you look into the lifetime Capital Gains exemption at all ? Finding an accountant with solid answers is like finding an honest lawyer !

 

[Grizz]

Thankfully the sale was going to be a share sale. The lifetime exemption was $500K but I believe is $750K now per person so I'd suggest you peddle off half your shares to your significant other if that isn't done already.

We were also quite fortunate in that our lawyer has been with the company since the beginning in '85 and is actually a long time friend. He also had experience in M & A so looked after us well. That's not to say that it didn't cost plenty of $$ for an exercise that didn't ultimately go anywhere.

No doubt it will be a test for you. Good luck with the transition.