In the long term, Barry has several options. He could sell the business outright, perhaps to a production builder looking to create a custom home division or to another custom builder in his market. However, most custom builders prefer to grow their businesses internally, rather than through acquisition.
Because of the nature of the custom building business, the best way to get real money from the company would be to offer a buyout to his key employees. The employee buyout could be phased in over several years, and could be tied into a profit-sharing program. This option would continue to provide a revenue stream for several years as the employees paid off the equity, and Barry could enjoy an “emeritus” status as the “revered leader,” complete with part-time salary or consulting fees.
The danger here is that Barry may be hesitant to let go of control, and allow the employees to actually run the company.
If neither of these options is available, Barry can simply plan to gradually shut down his business, building fewer homes per year and reducing his workload until he can effectively retire.
In all of these scenarios, it is in Barry’s best interest to begin grooming his employees for higher levels of decision making and autonomy. While it may not be as flattering to Barry’s ego to know that his company can run without him, this could provide Barry the freedom to actually reduce his workload and spend more time with his family, without retiring. Many of us are living active lifestyles long beyond the traditional retirement age, and would enjoy playing a role in a business we have grown and nurtured. This could be the ultimate outcome for Barry, in which he has the leisure to enjoy life, but without all the day-to-day pressures and stress.
Al Trellis, a co-founder of Home Builders Network, has more than 25 years of experience as a custom builder, speaker, and consultant. He can be reached at altrellis@hbnnet.com.
