Every year I meet with LBM dealers to discuss succession planning. During these conversations, I typically ask lots of open-ended questions so I can learn as much as possible about the owner’s goals, expectations, and concerns. As part of my discovery process, I like to ask the owner what they would do if they could move the risk of ownership from themselves to the next generation of leadership. The answer I receive from many dealers is that they would like to continue to work in the business but would enjoy reducing their long hours and eliminating some of the stress that comes from worrying about employees, customers, and suppliers.
This industry is full of honest, caring, and hardworking people who want to do the right thing for all the stakeholders involved. At the same time, this intensely passionate devotion to work can lead to a lack of creative thinking when it comes to your personal goals. The business you own defines who you are to your community but perhaps most importantly, to yourself. Envisioning life without the business to define you can be difficult and becomes even more emotionally fraught when we begin to discuss ownership transitions and what life would look like post-transition.
To help you with the process of creative thinking, here are a few tips to help you define your post-ownership goals.
There are no wrong answers
A common response from dealers when we ask them about their post-ownership plans is that it is all hypothetical and therefore hard for them to think about concretely. Our response to this is to remind them that every year they sit down with their management team to create a budget. That budget not only includes the typical items (salary, fuel, repairs, etc.) but typically also includes aspirational items that fit into your longer-term strategic plan such as adding a new location or creating a marketing plan to attract and retain younger customers and employees.
What we are asking you to do with your post-ownership thought experiment is to have similar aspirational thoughts. Ultimately, there are no wrong answers, it is your life so we encourage you to use your creative business brain for the benefit of you personally.
Don’t keep your thoughts to yourself
Emotional discussions can be difficult, especially when they focus on our attachment to our business. However, it is much better to discuss these emotions by finding a trusted family member, colleague, or advisor who can listen objectively to your thoughts. As you begin to define your post-ownership goals, you do not need a concrete objective in mind (e.g., I want to buy an RV and travel to every National Park). What is more important is for you to have another person to talk to, even if your thoughts seem scattered and random. The more you discuss your goals, expectations, and concerns with other people, the more real they become to you and that leads to better defined goals.
It’s OK to feel uncomfortable
Getting out of your comfort zone is always easier advice to give than it is to implement. However, you have defined yourself as the owner of an LBM business for the past three or four decades, so how could you not be uncomfortable thinking about post-ownership life? But just because thinking about post-ownership life may be uncomfortable does not mean that it should not be pursued. Confronting your inner emotions is the toughest task that most of us face and the earlier you begin the process and the more open you are with yourself, your family, your employees, and your customers, the more you will find that these stakeholders support your goals. In many instances, the people you interact with daily can be your best cheerleaders for moving beyond ownership because they have an intimate knowledge of the work you put into the business each day and they would like to see you spend time putting yourself, and not the business, as the top priority.
There is nothing wrong with wanting to lend your experience to the business in a post-ownership mentoring role. However, if you do not mentally and emotionally move on, the institutional knowledge you could impart on the incoming owner(s) can be overshadowed by your inability to move beyond ownership. That is why defining your post-ownership goals is such an important exercise and why these goals need to involve creative thinking that places you outside of the business.
Stratus Wealth Advisors owner and founder Sam Brownell helps independent dealers by quarter-backing a comprehensive succession planning process to provide clients with essential data and advice to make the best decisions for their company and their family. Reach Sam at email@example.com.