Preparing for a Post-Entrepreneurial Life
Debra Turpin, Cofounder, River City Studio
How do you know when it's time for life after entrepreneurship? Selling the most important asset in your life – the one you've poured heart and soul into – shouldn't be tied to the day Social Security kicks in. It should be a process started three to five years before the final event, as the planning for life after entrepreneurship is equally as important as your first business plan.
How do you know when it's time to go? For me, I can locate the answer to that question in time and place.
It was January 2001. I was on vacation rehabbing investment property I own in Mexico, when I received an email from an entrepreneurial group doing a roll-up of small boutique design firms with Web development divisions. The company that I founded in 1985, River City Studio, seemed to be a perfect match for them. Additional emails awaited me on my return to the office, and while I had not even started to think about "life after…" this offer was too good to ignore.
New investors from the insurance industry and the events of 9/11 killed the deal. I was nonetheless smitten with the thought of "life after entrepreneurship." I had done much soul-searching through the process of due diligence, and was surprised to find that perhaps it was time to start planning for a new stage in my life. Call it post-entrepreneurship, if you will, but you will know it when you see it, whether you seek it out or it comes knocking on your door.
Signs of Change
For me, approaching 50 and having a good offer appear were two milestones that started me on a serious path to thinking about "life after…." I'm 51 now – my children are grown, I have grandchildren to enjoy, and my husband and I are becoming more involved in our hobbies, such as our investment properties in Mexico.
In addition, I had been running River City Studio for a long time, nearly two decades, just as my husband and his partner had been operating their business, River City Meat Co., which supplies hotels, restaurants and caterers, for more than a dozen years. We weren't 30 anymore, and the future was not as distant as it once seemed.
While I still have a passion for what I do, I don't need it as much on an emotional level as I once did. When you've been in a career for 20 plus years, the need to prove yourself is gone. You've already done that. I was honored as Kansas City's Advertising Executive of the Year in 1998; success doesn't get any better than that.
And I was never in business for the money. With kids grown and a spouse in a successful business, financial requirements have changed as well.
For all of you entrepreneurs out there contemplating the next stage, those are the signs that it's time for a change. What follows is a look at what you do next.
Getting It Together
Even though the deal to buy my company had fallen through by mid 2001, my personal landscape was forever altered. I knew that I was in another stage, running my company with an eye to when I am no longer around rather than to what I need to do to build and grow it.
The upshot is that now I plan to be out of River City Studio within five to seven years, preferably five, just as my husband, who is 55 years old, expects to sell his company by the time he is 62.
In the interim, specifically for the last six months, we have been doing the necessary planning for the next stage. For we believe that it isn't smart to ignore the tactical steps necessary to achieve your post-entrepreneurial goals.
My husband, Paul, and I have done a lot of talking and planning. He's begun putting together a financial plan, just as I did shortly after we spent a month in Portugal in 2001 following the collapse of the transaction to buy my company.
We've taken a closer look at the activities we like to do together, such as travel, and we've begun gravitating strongly toward making one of our outside interests – investing in vacation property – the area in which we will focus in "retirement." At the same time, we're accepting an altered mindset that we will be engaging in this endeavor, not as a business that must produce at 100 percent, but rather as an activity that might be profitable but that primarily will give us pleasure.
Fun, in short, is our altered perspective for post-entrepreneurial life, and we're in the process of getting used to that.
A Matter of Money
Now, for the financials: you might also be tempted to pack it in when your business isn't doing well, which had been the case for River City Studio over the past three years. The plummeting economy and technological advances that have made graphic work more accessible has meant hard times for my company.
Occasionally, I have wanted to walk away, but both practical and emotional reasons have prevented me from doing so. On a practical level, though I could sell the commercial building I own and have enough money to get by, I would feel more secure, as would my husband, if I were able to add to our retirement fund a sum of money from the sale of my company. In no way do we want to live on a fixed income, or be pressured to have to earn a certain amount, once our entrepreneurial lives are behind us.
On an entirely different level, I don't want to feel as if I gave up on the business that was my life for the past 20 years. I want to feel that the experience was worthwhile and that I had something to show for it and leave behind.
Room With a Different View
From the perspective of knowing that it is time to go, and having done the necessary emotional and financial planning, I believe that you, the entrepreneur, consider the business differently.
In my case, for example, I am focused on making sure I keep a strong management team in place and on finding someone who can eventually replace me. I wouldn't have been thinking along those lines a decade ago.
Knowing that I need to get the company in the best possible shape for an eventual sale, I am concentrating on full-service clients rather than project work, especially when it comes to clients with whom I haven't worked previously. It takes a lot of time to build relationships, and you never get it back if all you do is project work. And now that the recession is starting to fade, I need to concentrate on my bottom line and make sure it stays in the black in order to attract interest in ownership, either within the company through an ESOP or from an outside buyer.
Tactically, beyond my company, I am pondering decisions, such as whether to sell my commercial building and invest the proceeds, no matter what course of action I take with River City Studio itself.
On a happier front, I am continuing my other-than-entrepreneurial activities. Besides our investment properties in Mexico, my husband and I recently visited Paris with an eye toward pursuing investments in that locale. I enjoy chatting with people via email, helping them plan their vacations to our properties in Mexico, and I want to be doing more of that.
A Final Word
So, you see, I am planning and engaging actively on all fronts. Having experienced the shift – the realization that I am in another phase – I am riding it for all that it is worth, knowing that it will lead me to some place new and special.
As it will for you, the entrepreneur. Pay attention to the signs that tell you it's time to consider "life after" entrepreneurship – and then get to work preparing to make the best of your next stage.