Business owners feel the forces of demands of the business, their customers, their team, their stakeholders, their family, and often put themselves on the bottom of the list.   As the business grows, experiences ups and downs, and presents what seem like a never-ending series of demands, the owner may feel like their business owns them, not the other way around.    Below is the story of my journey from busy entrepreneur to retired and how I was able to plan and accomplish the transition.

After a few decades of working in the corporate rat race and managing to work my way into the ranks of middle management for a Fortune 500 company, I became restless, unfulfilled, and looked for a change.   I realized I was not excited about how I spent my time, and the passion for what I had accomplished earlier in my career was waning.   The prospect of changing to a different company in a similar role was not at all positive.   I started to look at doing my own thing, exploring businesses that I could start, buy, or franchise to get a fresh start and re-center how I spent my time.

I had a coworker who was feeling the same thing, and we both had similar passions.   One of those passions was racing: participating in racing, watching racing, being around other fans and participants.    It’s how we spent our weekends, what we spent our extra money on – it’s what brought us joy.   We discovered that each of us was feeling similar emotions about our corporate jobs, and both had the desire to do something more fulfilling.  We started with casual conversation, then some spreadsheets, and before long we had a business plan, lined up some investors, and found ourselves shopping for commercial real estate and funding large enough to open Cincinnati’s premier indoor go kart track.   Our goal was to bring our love of racing to as many people that wanted to try it and allow those that wanted to experience the thrill we both enjoy so much.  We wanted to do that on our terms – safely, with the highest quality, and without any compromises to our core values.

As partners of different ages, we recognized that life would happen, we would disagree on some things, our goals would change as we grew, we would likely want to get out of the busines at different times and above all we wanted to maintain our friendship.   I was sending kids off to college, and he was looking forward to stop purchasing diapers for his kids.   We established a strong operating agreement that was the foundation of our relationship.   This agreement, along with open dialog, and a buy-sell agreement that was established very early in our incorporation, ensured we had a framework for changes in the company.   It also made hard discussions easier.

After a few successful and exciting years, and a few accounting firms later – we came upon the team at MACKEY.  We were struggling with cash flow, growth, and had trouble getting our business finances under control – we had a great top line, decent net income, and yet we felt like we never had any cash at the end of the year.   We needed a change, a different perspective, a better financial partner.  We needed an accounting and finance team that would actually hold us accountable, not just make sure we met our tax liability in the most efficient manner.   Our first year with MACKEY was getting our house in order – making sure our books made sense, making sure we understood and were focused on what the data was telling us.    As we gained confidence and became more comfortable with the numbers and what they were telling us, we expanded the role of the MACKEY team to become more integral in our decision making.

We began utilizing their fractional CFO service called Prosper for Business, and started to look at our business and what we each wanted out of it differently.   We used the process and the expertise brought from the team to set a plan in place to set the company right, correct the issues we were facing – and along the way, we made some discoveries that would ultimately lead to us ending our partnership.   That ending was most positive, in that we each discovered what we really wanted for the company and our personal lives and we remain friends today.   We participated in some great exercises, and had thought-provoking discussions that allowed us to focus on our own definition of prosperity, where we saw the business going, and how the business played an integral role in our long term financial independence.   In a nutshell – here’s what we learned over the course of a few years:  I was not interested in taking additional risks – I was OK with the company the size it was, and doing what we were doing and how we were doing it.   My partner, however, wanted to grow, acquire, expand our offering into other areas to provide additional revenue streams, do more for the customer.   He had visions of 5 locations with expanded offerings in the next 5 years (we had 2 at this point – due to the acquisition of a regional competitor).   Here’s where things really started to get interesting for us.

The data collected and used during our prosperity for business told a story that really supported my partner’s plan – we needed additional revenue streams, additional attractions, more locations to make the business reach its potential.   I faced the obvious answers with some trepidation – and recognized that growth and change were critical to the long-term success of the company and the opportunity for my partner to build some long term wealth.  His savings were cut short by him leaving a comfy corporate job prior to really allowing his 401k to flourish at the level needed for him to retire perhaps decades later.

While all of this was unfolding, on a separate but certainly related path, my wife and I decided to explore an invitation from Mackey McNeill to take look at the services offered by her personal financial management firm, The Prosperity People.    We felt that our current planner spoke a different language, made the task of managing our savings for the future some mysterious thing, and didn’t always make us feel comfortable.   I had seen some great results from the MACKEY team, and decided it was worth a look; my wife on the other hand had her guard up.   She disliked the current planning process and saw it as a necessary evil – she was wary that we were stepping into a sales pitch for more of the same.    After our first meeting with Andy, we both had a much more positive outlook about the planning process.   We talked about dreams, we talked about life and lifestyle goals, we felt very comfortable with that part of the process, and interestingly, we really didn’t talk about money.    He gave us an overview of the process, had us write down our goals on a lot of topics (independently) and collected some data.   Our second meeting with Andy started the framework of a plan.

We had been in the planning process and learning how to interact with the plan for a couple of years when I posed the question, “When does it make sense for me to look at exiting the business?”  I assumed I was facing years of unwinding.  The activity on the business side was well underway and we had good data at our disposal that showed current and potential of the business.   The MACKEY team and The Prosperity People talk to each other regularly, so the complete picture was easily assembled.

Here’s what Andy’s analysis told us: First, my gut feeling about not taking any more debt and keeping the business and risk small was the right course of action as it related to our personal plan.  Our years of 401k contributions and additional investments had grown and positioned us well.   We had achieved our goal of financial independence and taking on more risk at this point in our lives was inconsistent with our plan.  Second, building an exit plan that allowed my partner to assume my shares of the company with payments over time enhanced my plan and allowed my income stream to get reduced in a controlled manner.  Lastly, my exit from the business would allow my partner to increase his holdings, help reduce the burden of covering the costs of 2 owners’ salaries, and reap the benefits of the growth that the Prosperity Plan for Business indicated was the right course of action.   Andy’s answer to my question of exiting the business was “as soon as now!”

Now our discussions about growth and change had a new element – a transition plan for me and the business.    After a few days of heart palpitations, my partner realized he was ready, and with my involvement in a well thought out transition plan, and the team at MACKEY by our side, he was up to the task of taking this business on without me.   We worked over the course of the next 9 months to build and execute a plan.  It included the addition of revenue streams and attractions, identifying what gaps I would leave unfilled, hiring the right people to fill those gaps – and developing metrics to help show the success of these moves.

I’m happy to report that I have transitioned into my next chapter and so has my partner and the business – I find fulfillment doing some business coaching and mentoring, some volunteer work, spending time with my aging but healthy dad, and seeing some great sites while travelling.   My wife has not yet joined me – but our plan tells her she can when she is ready.   She finds a great deal of satisfaction in her current role and has a transition plan and timeline in mind already, thanks to the plan we built with Andy.   Oh, and my former partner?  He has grown the business significantly, added more revenue streams and attractions, and is on the hunt for more locations.  He has the folks at MACKEY still by his side, still holding him accountable, still there for him listening, coaching, measuring, and encouraging.