LIFE AFTER EXIT: FINDING YOUR WAY THROUGH THE UNKNOWN
LIFE AFTER EXit: finding your way through the unknown
LIFE AFTER EXIT: FINDING YOUR WAY THROUGH THE UNKNOWN
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INTRODUCTION
Introduction
A business exit is maybe the most finely balanced risk any entrepreneur can take. Timing is crucial: too late and you risk missing out on the deal of a lifetime, often due to factors beyond your control. But too early and you risk selling for less than your business’ potential.
The decision over when to exit is just the first in a new series of challenges you will face. Life after exit can be a daunting path: a period of adjustment, a moment of self-reflection, a challenge to existing relationships, and questions over ‘what next?’. And yet, it brings financial freedom. It is a chance to try new things, re-connect with loved ones and build a legacy. It is a unique opportunity to use your wealth and free time however you choose.
Over the course of two roundtables in 2020, Coutts collected insights from an equal split of female and male entrepreneurs on life after exit. These events offered a chance to hear from business leaders on the challenges they faced and new opportunities they found.
From these events, we have identified four areas of focus - questions and considerations we believe all entrepreneurs must think about when approaching an exit:
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AdJUSTMENT
After years spent with your finger on the pulse of everything in your business, the sudden lifestyle change that comes with letting go is both an abrupt stop, and a fast, new learning curve. As the emails dry up, and the phone stops ringing, you need to build a new network and a new role. What steps will you take to prepare for this adjustment?
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LEARNING
It is not only your schedule that slows down in the immediate period after exit. Running a business is a dynamic experience that teaches you lessons every day. Have you considered how you will plug the gap and continue your journey of lifelong learning?
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CHILDREN
A sudden influx of wealth after exit may change your family dynamics overnight. Many entrepreneurs are concerned with spoiling their children, but the challenge of ‘generations within generations’ – your older children used to your previous lifestyle and younger ones who will grow up with wealth – is a unique new test.
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legacy
What links almost all entrepreneurs is a desire to leave a legacy. This is a chance to reflect on what you’ve built so far. If you’re not quite satisfied, or you feel there’s more to do, you now have the time and means to do something about it.
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AdJUSTMENT
After years spent with your finger on the pulse of everything in your business, the sudden lifestyle change that comes with letting go is both an abrupt stop, and a fast, new learning curve. As the emails dry up, and the phone stops ringing, you need to build a new network and a new role. What steps will you take to prepare for this adjustment?
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learning
It is not only your schedule that slows down in the immediate period after exit. Running a business is a dynamic experience that teaches you lessons every day. Have you considered how you will plug the gap and continue your journey of lifelong learning?
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children
A sudden influx of wealth after exit may change your family dynamics overnight. Many entrepreneurs are concerned with spoiling their children, but the challenge of ‘generations within generations’ – your older children used to your previous lifestyle and younger ones who will grow up with wealth – is a unique new test.
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legacy
What links almost all entrepreneurs is a desire to leave a legacy. This is a chance to reflect on what you’ve built so far. If you’re not quite satisfied, or you feel there’s more to do, you now have the time and means to do something about it.
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ADJUSTING TO A NEW WAY OF LIVING
ADJUSTING TO A NEW WAY OF LIVING
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adjusting to a new way of living
After years spent with your finger on the pulse of everything in your business, the sudden lifestyle change that comes with letting go is both an abrupt stop, and a fast, new learning curve. As the emails dry up, and the phone stops ringing, you need to build a new network of people whose experiences you can learn from and forge a new role, or roles. What steps will you take to prepare for this adjustment?
"The day before exit is the busiest day of your life, and the day after the quietest. It’s hard to get your head round going from hundreds of emails a day to zero overnight."
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FINDING OPPORTUNITIES FOR LEARNING
FINDING OPPORTUNITIES FOR LEARNING
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finding opportunities for learning
It is not only your schedule that slows down in the immediate period after exit. Running a business is a dynamic experience that teaches you lessons every day. Have you considered how you will plug the stimulation gap and continue your journey of lifelong learning?
"I went through a period of mourning and grieving when I exited because it was really letting go."
Many female entrepreneurs at our roundtables, particularly, found that exit had hugely reduced their pace of their learning. One said: “I’ve started to learn the piano just because since exiting I wasn’t feeling like I was learning or growing in any way.”
But while exit provides opportunity to take up new hobbies and learn new skills outside of the workplace, leaving one business does not have to mean the end of your career. One direction is to seek out real ‘roll your sleeves up’ board roles to continue that learning.
The contrast between men and women with regards to the importance of continued learning, could be down to any number of factors. But it is likely in no small part due to a lack of mentors for women on the entrepreneurial landscape. The Alison Rose Review of Female Entrepreneurship in 2019 referenced a lack of mentorship opportunities as a key barrier preventing women from starting-up.
The result? Many women are often put in a position where they are encouraged to take advice that is not in their own best interests. One said: “As a woman, I wasn’t taught to trust myself. I was taught to canvas everyone else’s opinions, look to experts and take what they said. But the clangers I made in my career were when I didn’t trust my gut. It’s probably only much later you can look back and reflect on that.”
In an uncertain post-exit period, a lack of a mentor to guide makes a challenging time even harder: “I went through a period of mourning and grieving when I exited because it was really letting go. It would have been great to have a mentor to put an arm round my shoulder and help me through it.”
And where that mentorship is perhaps most valued is in adjusting to a whole new level of wealth: “My exit did and continues to provide me and my children with financial security, but that’s a double-edged sword. I did not come from a privileged background, so suddenly having access to this wealth and financial freedom, I didn’t have anyone who was on my side or in my family who could take me aside and say ‘be careful with this, be strategic.’”
Coutts works with entrepreneurs before, during and after exit, providing financial advice and trusted advisors to provide guidance on next steps and how you can continue that lifelong journey of learning.
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APPROACHING YOUR CHILDREN’S RESPONSE
APPROACHING YOUR CHILDREN’S RESPONSE
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approaching your children's response
A sudden influx of wealth after exit may change your family dynamics overnight. Many entrepreneurs are concerned with spoiling their children, but the challenge of ‘generations within generations’ – your older children used to your previous lifestyle and younger ones who will grow up with wealth – is a unique new test.
Children who grew up in households of modest income or even financial insecurity, may find the adjustment to sudden wealth tough. Their reactions will often depend on what they’re used to: “My oldest child, who remembered a time when we lived more modestly, is afraid of admitting we are wealthy,” one entrepreneur shared. “My youngest however is just used to it. There are generations within generations.”
Another added: “My middle son told me he aspires to make lots of money. It was concerning as he has seen the wealthy lifestyle, but I don’t want him to be fixated on it. I told him he just had to do what he wanted to do in life the best he could and the rest doesn’t matter.”
A consistent concern was over spoiling children, with fears that doing so would prevent them from seeking to succeed on their own terms. One guest said their own father had not shared his own wealth until his children’s adulthood: “I didn’t even know about my father’s business until 15 years ago. When I asked him why he had never told me, he said it was his gift to me to make me want to aspire to succeed on my own terms. He was right.”
Ultimately, deciding what and when to tell your children about family wealth is a personal decision. Coutts can advise on the best approach to doing this with children of all ages, and how you can start introducing them to the meaning of wealth.
But life after exit for a family is not all about money. Again, a contrast was seen between women and men, as one female guest put it: “Being a mother and running a company is very different to being a father running a company.”
While both men and women said they regretted a lack of time spent with their families prior to exit, more women suggested that they exited their business as a result: “I was spending my whole life on aeroplanes when I had a young child, and then got pregnant again and was really starting to regret that time away. As excited as I was, I almost felt like I had two sides to me – my married name and my professional name, and it didn’t feel comfortable.”
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BUILDING YOUR LEGACY
BUILDING YOUR LEGACY
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building your legacy
What links almost all entrepreneurs is a desire to leave a legacy. If, on reflection, you are dissatisfied with that you’re leaving behind from your first exit, look to forge a new one. Think about how your own obituary would read, and if you’re not happy, you now have the time and means to do something about it.
Successfully starting, scaling and selling is a rare accomplishment worthy of celebration. One entrepreneur found the perfect formula: “I made a rule on the day we signed the deal that every Friday night, my husband and I were going to have a bottle of champagne together to remind ourselves we did something incredible. It’s so important to have those celebration moments and we still do it to this day.”
Many said the resulting wealth of exit was secondary to the feat of having built something, launched new innovations and proved critics wrong: “You reach a certain wealth and realise at a point it becomes unnecessary. It’s not all about the chase of the money, it’s about the achievement.”
And for some there is an even greater pleasure than the personal accomplishment – the fulfilment of a team journey: “I took such satisfaction from repaying the shareholders who took a chance on my business and my staff who built it. Exit was a recognition of that.”
It also provides time to throw yourself into your passions. The next business is an opportunity to leave a positive footprint: “If you have exited a business that wasn’t driven by purpose, then perhaps the next step would be to create one. Use your position to fulfil yourself beyond making money and influence causes you care about that are good for the world.”
And while exit gives founders a freedom to try their hand at new things, it should not be a burden to work out the right route to take. Each individual should progress at their own pace. For some, it is about moving fast: “What keeps me going? A sense of inquiry. I feel like I am in a race and need to cram it all in and prove I am not a one trick-pony.”
For others, it is a chance to slow down and experience the family life they may have missed out on: “Whatever I do next I don’t want to go at the same 100% pace. There is a work-life balance and you don’t need to put all your eggs into one basket and get completely exhausted.”
And a final message: embrace the unknown. No matter what you do next, you are in charge of your own legacy: “I look forward to uncertainty. I want to be able to navigate, but not plain-sail, to find out what I am capable of doing. You are still in charge of the ship of your life and you can take it wherever you want it to go.”
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