By: Patrick Ungashick
Legacy. This single word causes business owners more emotion when they are preparing for exit than any other single word. Few owners would define an exit as being “successful” if somehow their exit failed to uphold strongly-held values and beliefs. Legacy is hard to define. It means different things to different people. Yet it is immensely powerful. Many owners surprise themselves by how important legacy becomes a vital motive once they get close to exit. Legacy is so powerful that it can veto price. For example, many owners are willing to accept a lower purchase price for their company if it means making sure their employees, customers, and brand are treated better by that particular buyer.
It’s imperative to determine what is essential to you about legacy before you intend to exit when there is time to plan and implement steps that will achieve your success. (Read this article about why all business owners should start their exit planning five years prior to exit.) Waiting until shortly before exit to figure out what’s significant to you narrows your options and usually increases your stress. For example, many owners have some employees they want to thank once they exit, generally with significant bonus checks. Who to thank? How much to spend? Who gets what? These are some of the common questions that keep owners awake at night — owners who wait to address this until shortly before exit always stress with these decisions. Those questions are difficult to answer at any time, and even more challenging when you have dozens of other things pressing on you shortly before exit.
Figuring out your legacy wishes takes time and reflection. To help you get started, download this free white paper, The Three Laws of Legacy. This insightful article can help you identify what will be relevant to you about legacy—well before you reach exit.