This year I have shared
several approaches to building value so you can exit your business the way you
want. But what I haven’t addressed is what does ‘the way you
want’ look like. Do your dreams of exit include:
- A cruise around the world when you retire?
- A well stocked bank account?
- Being free of debt and obligations?
- Freedom to spend your days with only your agenda in mind?
- A substantial estate to pass along to your heirs?
Or is there more?
Recently I attended a
thought provoking event hosted by ACG Charlotte and sponsored by the Foundation
for the Carolinas, “Philanthropy and Exit Strategies”. This
panel discussion featured one local business owner’s commitment to
philanthropic goals as a primary outcome of his exit strategy.
Jay Faison is a serial entrepreneur having founded and sold two businesses prior to starting SnapAV. In advance of his exit from this last venture,
Jay sought advice from his trusted circle of professionals regarding donating a
majority of his business to a non-profit. Interestingly, he found
this more difficult than he had imagined. His attorney said his
plan was “inadvisable”. His wealth advisors saw it similarly. I
presume both considered the owner’s goals overly altruistic, and asked
themselves ‘why would he give away so much of his wealth?’
Maybe the reason was
quite simple: Because it was valuable to him.
I believe that every
business owner builds value in multiple dimensions as they grow and expand
their enterprise. Most of this value can be categorized in three
distinct areas:
Business Value: This is the value of the cash flow
engine or operating entity, with the business owner as chief executive and
operator.
Investment Value: This is the equity account, where
the owner’s capital appreciates, with the owner as shareholder.
Lifestyle Value: The perks of being the boss, setting
your own hours and priorities, with the business owner as beneficiary.
Or is it
benefactor? Owners have the latitude to build value to reap the
rewards or build value to share it with others. The freedom of choice is
perhaps what is most precious.
Value has as many
dimensions as humans have ideas and passions. For Jay Faison, what
he valued was the opportunity to positively impact global climate change. So he
created Clear Path Foundation (http://www.clearpath.org
to go live in early 2015). Most
scientists agree a warming environment results in polar icecap melt,
endangering the habitat of already threatened species and raising ocean
temperatures which spawn destructive hurricanes and storms.
Climate change is a
controversial topic. But as Jay sees it, if he’s wrong, his efforts will still
improve the global ecosystems. And if he is right, he and his
colleagues will help save humanity! Now that is valuable!
For this owner, lifestyle value manifested as quality of life value- for everyone. What’s
more important, it gives purpose, and power to Jay’s exit. He is
setting up his own foundation as a donor advised fund which allows him to guide
his philanthropic activities.
The result:
An owner's exit has tremendous purpose
So many owners are
afraid to exit because they don’t have a plan for post ownership. But
the plan may be as simple as considering how you could convert some of your
exit wealth into purpose value.
What do you want your
money to mean? Start now by thinking of how you can build purpose value and make a difference. Creating a charitable foundation is a
strategy for re-directing your influence and impact as a business owner.
“Life is full of
possibilities, so full that it's insanely ridiculous. Yet those possibilities
are meaningless unless you do something with them.” as Ralph Marston wrote recently in his
Daily Motivator.
Empower the value you've created to transform your passions into real impact, and thrive well beyond
your exit.
