When You're No Longer The Boss
Once you've ironed out the financial aspects of your earnout, it's time to gird for the psychological challenge. The transition from top gun to employee can be tough, particularly if one of your goals in becoming an entrepreneur was to escape corporate rules. But to survive an earnout with your payments -- and your sanity -- intact, "You have to learn to play the politics of the new company," says David Minor, William Dickey Entrepreneur in Residence at Texas Christian University in Fort Worth. "If you rant and rave, then you'll create a personality clash."
To make your earnout more pleasant and productive:
* Do your homework. If your buyer has purchased companies before, interview other former owners and find out what life was like after the deal closed.
* Get an outside perspective. A coach can help you see how you might be making things worse and give you advice about how to fit into a new corporate culture. To find one, try the International Coach Federation at www.coachfederation.org.
* Choose your battles. You've got to let the less important ones go, but don't ignore the big issues. Accountant Ira Feldman, who sold two companies to a division of H&R Block, says he and his partners waited too long to voice their dissatisfaction to the new management. By the time they did, "significant numbers of our clients had left the firm," says Feldman. "We should have worked with senior management right away to come to a solution."
* Find a mentor. A good relationship with a high-level executive at the new company can make your life much easier. Christi Black, who with partner Robert Deen sold their public-relations firm, says having "cheerleaders" at the corporate level smoothed her adjustment. They even inspired her to stay after her earnout period ended.
* Redefine what it means to be successful. Concentrate on areas of your life that have nothing to do with your business.
* Decide what is most important to you, and go after it. "Entrepreneurs generally need to feel they are making a difference, or that they are continuing to grow and learn," says Steve Mitten, a business coach in Vancouver. If, say, you don't feel you can make an impact in the new company, consider joining a volunteer organization.
* Make a long-term plan. "You want a light at the end of the tunnel," says Minor. If it's your intention to leave as soon as your earnout is over, decide what's next. For Deen, that meant starting a travel agency specializing in international hunting and fishing. Says Deen: "I haven't been bored a single day."