There is one obstacle in the way of a successful sale of your practice that might surprise you. It has nothing to do with your clients or staff. No. It’s your imagination!
What do we mean by that, you ask yourself…
Many accountants simply cannot imagine life after divestment of their practice. In my experience, accountants don’t retire; they just find new goals. And they are like Olympic champions (stay with me here); without a gold medal to work for, they go to seed. For working accountants, the gold medal is helping clients and staff achieve their goals, winning the next client, and nurturing their client’s growth.
When accountants sell their practice without clear their retirement plans, the drive that helped them succeed can cause problems (and cost them money). And the opposite is also true: a robust, well-thought-out plan for a purposeful life post divestment adds thousands of dollars to the sale price of your practice. Let me show you how.
Time to play golf or do more yoga is not enough
Most accountants dream of a time when they can do nothing or very little. Caught up in the cut and thrust of a thriving practice, it is all too tempting to imagine that lying on a beach is a retirement plan. It is not.
Your buyer needs to know that their investment is safe, and its value will not be eroded by interference from the vendor after the sale. They won’t believe your plan to play golf, do yoga all day, read all the books in your library, or spend more time with your partner (who is… sorry to say … probably busy with their own plans and won’t always welcome you as a long-term hanger-on).
Accountants have pattern-recognising, analytical minds that help their clients navigate the business worlds. You can’t turn that off. You must replace the excitement of your past work life with new realms to delve into.
To be realistic, your plans must match your personality. Typically, as a successful accountant, you have a need to help people and to use of your problem-solving expertise and ability to set and achieve goals. Your buyer wants you to be happy in your retirement, and to have a constructive time post divestment. For example, they may want you to stay on an ongoing mentor role; it’s just one of the many options.
How to develop a plausible purposeful plan for retirement
What your buyer wants to see – and will actually pay more for – is a plausible plan for a purposeful life post-divestment. Demonstrate to your buyer that you know what you want to do once you have sold the practice by talking with conviction about how you want your future to look.
Understand what makes you tick
Your retirement plan must satisfy the parts of your personality that your work life satisfied. Reflect on what makes you tick: what gives you the most pleasure, fun and satisfaction at work? What else gives you those feelings. If you are stuck, use a personality-profiling tool out to get you thinking (there are lots of excellent free ones on the web). Talk to your partner about your strengths and weaknesses (they’ll love sharing them with you).
Negotiate with your buyer to keep an ongoing mentor role
It’s ok that you want to take equity off the table and reduce your risks but still want to help out. Buyers know that and they like it. Your buyer may be delighted to keep you on as a mentor in a part-time capacity, but you must negotiate the terms. How can you be most helpful to them, and what is going to get their back up? Always be honest with them and yourself. If you can’t be involved without wanting to run the show, step aside. It’s painful, but there are processes to work around this.
Invest in a start-up
You are a business expert. You created a practice of value and meaning. Thousands of young entrepreneurs want a helping hand from experienced accountants. Join a board or an advisory committee and help a young person get started and make their business valuable and meaningful.
If you have some disposable capital, you can invest in the company: $50,000 goes a long way these days. Join an “angel group” if you would like to find opportunities, meet like-minded investors, and share risk.
Look for other activities that match your personality
Business is exciting, rewarding and social. But, while gardening is rewarding, it is not so exciting (or is that just me?) or social.
Choose a post-divestment activity that matches the excitement, rewards and social connection that your business offered. Do you want to become a speaker, or write a book? Do you want to go back to university, become a wine-maker or a personal trainer? Keep your mind open to all the possibilities.
Giving back is amazing and you have a lot to give.
Get started now
Planning a purposeful life post divestment takes time. And it’s as valuable to your sale price as tidying up the books and putting your key employees on restraint-of-trade contracts. Even more important, if you imagine a truly valuable way of spending your time after selling your practice, do forget to think and truly focus on all of the fun you can have.