Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
UPSIZE STAGES: EXIT STRATEGIES
10 :: Deciding what's next
Retirees with a plan
fare better after
business sells
Retirement used to mean spending a few years on the golf course, having nice dinners with friends, spending some time with the grandchildren, and maybe some travel. But baby boomers are living longer than ever and they?re often pushing retirement further into the future as well.
So while business owners need to take three to five years to plan and execute their business strategy they also need to make sure they know what retirement means to them.
Some recent business sellers say it?s important to take some time ? up to a year ? to decompress after a sale. It?s OK to back away for a while. But business brokers and other financial advisers also suggest that these quasi-retirees at least have a plan. Entrepreneurs should talk with their families, friends and advisers about what retirement means to them before selling their business. The retirement years can end up lasting a long time and many people, especially those who have spent years wrapping their identity around business ownership, often find that they can only play so much golf.
Some sellers are actually looking to retire. But many will stay on with the company after selling it, enjoying the opportunity to stay involved in less of a leadership role with more opportunities to spend time with their families. That can come with some downsides, however. Many times the new owners don?t bother picking the seller?s brains, feeling they can take over and do a better job. Many advisers say buy-out deals are almost always bought out early.
Some sellers do so in order to start tinkering with another business idea or to move south and take the business concept they just sold to their new residence. For some it means volunteering or becoming a community activist.
These days it?s not uncommon for business brokers and other advisers to do some coaching for their clients to make sure they think about these issues ahead of time. Regardless of whether the seller has something to transition to right away or they wait a year or more to jump back into having daily activities, studies have recently shown that business owners who head into retirement with a plan have greater self-worth and longer life expectancies than those who don?t.
That means it?s more important than ever before that business owners have an idea of what they want to do next before they unload the business they?ve spent so much time building.
As the name suggests, Owatonna-based Kamp Automation looks for customers with a process they’d like to automate. It could be a small, inconvenient, tiny part that people can’t assemble. It could be a high-volume product so needed that the customer can’t find enough labor to produce it in the necessary quantities. “We’ll work anywhere from medical device companies to the seed industry for corn and soybeans,” says Kent Patterson, co-founder, president and CEO. “We just jump all over wherever there is custom automation.” The company started in his garage. Patterson and his partners built a machine. The company started to grow to the point where now it has 48 employees — and had a bunch of people and stuff in different locations. “We went from a garage to a shop to a shop and just kept moving to new places and signing leases,” he says. “We got to a point where it’s like, OK, this is getting big enough and sustainable — we felt that we wanted to look for our own space.’”
