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What a fine mess this is, got an opinion?
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Shaddim
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Jun 1, 2010, 01:04 PM
 
My initial plans were to retire at 50. I had a dollar amount in mind, and once I reached that sum I would be able to relax, write, travel, and concentrate on private instruction. Well, the last two years were quite good (some could say almost magickal ), and I wandered into a few real estate deals that moved up my time table considerably. A couple weeks ago I was made an offer for one of my businesses, it's associated with ATM services. It's been doing rather well, well enough to hire more folks, and I had more-or-less stepped back into a broad administration role. You know, the guy that walks in, asks how everything is going, and then leaves to get the hell out of the way. Well, a larger firm wants to buy the whole thing, lock, stock, and barrel. If I did this, I could retire immediately and be well above my goal, I'd still be involved with investing and a few random deals, but that wouldn't take up very much of my time.

Here's the catch, I'm worried about what would happen to the employees and I feel an obligation to them. It may sound extreme, but nothing could keep this other company from stripping it bare and tossing everyone out on their ear. I've talked with them and tried to stress that it all works so well because the management and employees are damned good at their jobs. In my opinion, I feel that they understand, but I'm still nervous and don't want to see anyone put through the hardship of losing a job at a time like this. Normally, under these circumstances, I'd be inclined to pass, but I have a strong, nagging feeling that passing up on this would be a mistake. I've learned to trust that impulse, but never before has a decision like this directly impacted so many other people in this way. To many people I may seem hard, egocentric, and like a bit of an ass, but that's a cultivated demeanor. In reality I toil in the background to make things better for people who are connected to me. After thinking this over for some time, I could make sure that if anything happens to them I'd pull some strings and get them on somewhere else, but they've put a lot of themselves into this.

I've talked with those closest to me and they're perfectly split on the issue, and I don't normally ask people outside of my sphere their opinions regarding personal matters, but my head is hurting with thinking about it all and I'm starting to run out of time.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
- Thomas Paine
     
residentEvil
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Jun 1, 2010, 01:29 PM
 
take care of yourself first. you set a goal to retire and do what you want (travel, write, etc); that is now in your grasp. you take it and don't look back.
     
Cold Warrior
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Jun 1, 2010, 01:30 PM
 
You could negotiate a layoff freeze period, or a certain number they couldn't lay off before a certain date or without generous notice and above-average separation benefits. Nothing that would tie the buyers' hands but enough to ensure they're not out to immediately gut the place.
     
Doofy
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Jun 1, 2010, 01:32 PM
 
Originally Posted by Shaddim View Post
I could make sure that if anything happens to them I'd pull some strings and get them on somewhere else
This.

You know what's coming. You know there's a good chance it's all going to go belly up in the next couple of years anyway. Surely better to be in a position where you can drag a few people up, rather than be in the same sinking ship with them?
Been inclined to wander... off the beaten track.
That's where there's thunder... and the wind shouts back.
     
imitchellg5
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Jun 1, 2010, 02:13 PM
 
To answer the title, opinions are like exhaust tips. Everyone has at least one.

You sound almost exactly like my mom's boss. He planned on retiring at 50, and says he has, but realistically he's still pretty involved in his office. He shows up on Mondays, Wednesdays, and Thursdays (IIRC) and basically to make sure that everything is running smoothly, no issues have cropped up, the employees are feeling great, etc. So just say you're retiring, but don't
     
nonhuman
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Jun 1, 2010, 02:15 PM
 
Originally Posted by imitchellg5 View Post
To answer the title, opinions are like exhaust tips. Everyone has at least one.
Not me! I have zero exhaust tips! (Unless you count biological exhaust...)
     
CreepDogg
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Jun 1, 2010, 05:35 PM
 
I guess my question would be - what were you planning to do at age 50? Were you going to sell and walk away then, or were you going to remain involved at arm's length? The employees will still be there and have the same needs when you're 50 (barring Doofy's doomsday scenario), and I would think you'd be grappling with the same issues then. So you're just moving up the timetable. Good luck, and congrats on the opportunity.
     
reader50
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Jun 1, 2010, 05:43 PM
 
Check up on the company making the offer. They may have purchased other operations in the past. See what happened in those cases.

You can find out a lot from SEC filings. If you buy one share of the new company, then you can ask for their usual records available to stockholders. Look for cost cutting after previous buyouts. Or bragging about profit margins produced from human resource management improvements - ie, mass layoffs.
     
Big Mac
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Jun 1, 2010, 05:44 PM
 
Congratulations on being so well put together financially, Shaddim. That's an enviable position I hope to be in one day.
Originally Posted by Cold Warrior View Post
You could negotiate a layoff freeze period, or a certain number they couldn't lay off before a certain date or without generous notice and above-average separation benefits. Nothing that would tie the buyers' hands but enough to ensure they're not out to immediately gut the place.
Cold Warrior has a good point. If the potential buyer really wants the business, you should have room to negotiate protection for your employees.

Additionally, though, another thing you really have to consider is whether or not it makes long term financial sense to sell your business. The buy-out may sound really good, but is it really all that great after the high taxes you'll have to pay? Is it really that great compared to the income you're giving up by cashing out? There are sources that have created formulas to determine whether buyouts make sense from a long term financial standpoint. Moreover, others have brought up the fact that what you want to do with retirement is very important. Regular work provides a person with a sense of purpose and accomplishment. If you're rushing to retirement, are you sure you really want to retire? What will you do with all that free time? I'm sure you've thought about these issues, but this is a big decision for you so it makes sense to really analyze the choices you're going to make going forward.

"The natural progress of things is for liberty to yield and government to gain ground." TJ
     
SVass
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Jun 1, 2010, 05:47 PM
 
Originally Posted by Shaddim View Post
My initial plans were to retire at 50. I had a dollar amount in mind, and once I reached that sum I would be able to relax, ....
I've talked with those closest to me and they're perfectly split on the issue, and I don't normally ask people outside of my sphere their opinions regarding personal matters, but my head is hurting with thinking about it all and I'm starting to run out of time.
In 1995, I got a buyout offer and accepted! I kept mentally occupied and have been happy. Life is about more than making money!
(I could have stayed and made those who inherited my wealth rich.)
sam
     
Doofy
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Jun 1, 2010, 06:02 PM
 
Originally Posted by Big Mac View Post
Moreover, others have brought up the fact that what you want to do with retirement is very important. Regular work provides a person with a sense of purpose and accomplishment. If you're rushing to retirement, are you sure you really want to retire? What will you do with all that free time?
I'm certain that Shad's of the ilk which will find something useful to do in retirement. I think we all are here, aren't we? Retirement blues only tends to affect those who haven't the wherewithal to figure out what to do with their time.
Been inclined to wander... off the beaten track.
That's where there's thunder... and the wind shouts back.
     
Shaddim  (op)
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Jun 2, 2010, 07:56 PM
 
Thanks for the input. After thinking about this and talking things over with the girls until we went mad, I've decided to take their offer. Already contacted them and our lawyers will be hammering out all the details. Coincidentally, they thought I was stonewalling them (they had no clue that I was having a small moral crisis), so before I could tell them that I would accept their offer they sweetened the deal by a decent amount and are making provisions for the employees and management.

It's always best to take your time and do the right thing, these things do have a tendency to work themselves out.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
- Thomas Paine
     
Big Mac
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Jun 3, 2010, 07:27 AM
 
Many congratulations on exceeding your financial goals, Shaddim. I'm glad it worked out for you so well.

"The natural progress of things is for liberty to yield and government to gain ground." TJ
     
ghporter
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Jun 3, 2010, 07:42 AM
 
I commend you on your commitment to your workers. And your delay seems to have been to the workers' advantage, so I guess agonizing over it for a while was helpful.

Congratulations!

Glenn -----OTR/L, MOT, Tx
     
Rumor
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Jun 3, 2010, 09:52 AM
 
Is it possible to hire a GM (or CEO, etc) to take care of the day to day, then sit back and collect income?

I think it is great that you are concerned about your employees. It doesn't seem like many business owners are these days. What about selling the business to a handful (or all) of them? Granted you probably wouldn't get as much money as selling it to a bigger firm, but you would get a lot more personal satisfaction from it knowing that they are secure in their work.
I like my water with hops, malt, hops, yeast, and hops.
     
finboy
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Jun 3, 2010, 12:46 PM
 
Originally Posted by Shaddim View Post
The "goal to retire at 50" is pretty much irrelevant. What I'd pay attention to at this point is that a sequence of things put you in a better place right now relative to where you were -- you've been lucky, but luck is largely created rather than received.

Nobody can say at 50 that their likelihood of running out of money is low enough to retire. Nobody (except Bill Gates, maybe). You just can't predict the future that well.

Anyhow:

You can take it that your "luck" is a signal that you need to continue, and perhaps spin your recent success into an even better lifestyle. By "lifestyle" I mean "higher likelihood that you won't run out of money before you die."

Or you can take it that your "luck" means it's time to move on to new things. If your employees are the key to the business, find out why the other guys want to buy it. They PROBABLY think that they can run it better than you do (hubris is cheap), especially if you're so "hands off." They may see that as a sign of maturity in the business rather than exceptional management talent on your part. Or maybe they think that they can lean it up and still do OK -- fire lots of people, sell assets, etc. and keep their numbers up. Maybe they're just buying it for the pure franchise value, to cinch up a market or get a toehold in something or place that the don't have. In any case, you should be able to tell right now if there's a high likelihood that people are going to get let go after you leave. If that's going to be the business model after the buyout, then don't leave.

I've known plenty of folks to "retire" and then end up back in the office within 5 years, and NOT by choice. Folks with plenty of cash around, it made no difference. At 50, your opportunity cost of leisure, especially if you're a creator, is huge.

What you have to ask yourself is "If I'm probably going to have to work again anyway, would I rather work with THESE GUYS?"

Just my two cents, but I've seen this over and over and over. Even if you leave, you'll need to find something else to do with your time AND your money.

Believe me, I understand your reticence. Loyalty to your people is just about as important as it gets, right next to family. Kept me awake many nights, still does.
     
Shaddim  (op)
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Jun 3, 2010, 04:57 PM
 
Originally Posted by Rumor View Post
Is it possible to hire a GM (or CEO, etc) to take care of the day to day, then sit back and collect income?

I think it is great that you are concerned about your employees. It doesn't seem like many business owners are these days. What about selling the business to a handful (or all) of them? Granted you probably wouldn't get as much money as selling it to a bigger firm, but you would get a lot more personal satisfaction from it knowing that they are secure in their work.
There is a GM, I hired her some time ago and she's done a fantastic job. I still drop in on occasion, but like I said before, it's mostly just for a few minutes to say "Hi" or to sign something. I did consider selling to the staff, but it would have been for many times less than I was offered by our competitor. I'm all for being generous, but there are limits.

Originally Posted by finboy View Post
The "goal to retire at 50" is pretty much irrelevant. What I'd pay attention to at this point is that a sequence of things put you in a better place right now relative to where you were -- you've been lucky, but luck is largely created rather than received.

Nobody can say at 50 that their likelihood of running out of money is low enough to retire. Nobody (except Bill Gates, maybe). You just can't predict the future that well.

Anyhow:

You can take it that your "luck" is a signal that you need to continue, and perhaps spin your recent success into an even better lifestyle. By "lifestyle" I mean "higher likelihood that you won't run out of money before you die."

Or you can take it that your "luck" means it's time to move on to new things. If your employees are the key to the business, find out why the other guys want to buy it. They PROBABLY think that they can run it better than you do (hubris is cheap), especially if you're so "hands off." They may see that as a sign of maturity in the business rather than exceptional management talent on your part. Or maybe they think that they can lean it up and still do OK -- fire lots of people, sell assets, etc. and keep their numbers up. Maybe they're just buying it for the pure franchise value, to cinch up a market or get a toehold in something or place that the don't have. In any case, you should be able to tell right now if there's a high likelihood that people are going to get let go after you leave. If that's going to be the business model after the buyout, then don't leave.

I've known plenty of folks to "retire" and then end up back in the office within 5 years, and NOT by choice. Folks with plenty of cash around, it made no difference. At 50, your opportunity cost of leisure, especially if you're a creator, is huge.

What you have to ask yourself is "If I'm probably going to have to work again anyway, would I rather work with THESE GUYS?"

Just my two cents, but I've seen this over and over and over. Even if you leave, you'll need to find something else to do with your time AND your money.
They're buying it for it's market penetration and franchise value, that part is very obvious to me. After looking at what's happened to other companies who have sold to them, it seems they leave them mostly intact but move some support aspects to their central system. That makes sense and I understand why they do it. After a long talk with them I feel more comfortable, there are written assurances that the staff will be fine, so the worst of my fears were laid to rest.

I think a lot of people feel that if they could squirrel away a couple million in cash and investments that they could survive off the interest, and that very well could be accurate. But, I'm not one of them. Heh. I don't like the idea of simple survival, and it's a much larger pie than anyone else is aware of. Like I said before, I'll still be active in our investments, and the rest of the family have their businesses and careers, I'm just shifting my focus to other activities that I feel are more important. This is my chance to establish an institution that will change an entire field of study, and in a lot of ways my work is just starting. Also, there's my original company, but it's now directly a part of that institution. Wow, when I think about it that way, it doesn't sound like I'm going to be able to relax very much at all. Good thing I'm hiring a personal secretary to transcribe hours and hours of my stream of consciousness rambling and help me keep track of it all.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
- Thomas Paine
     
   
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