There are many good reasons to begin retirement and legacy planning sooner rather than later. Among them is the simple fact that circumstances may arise that can force a hasty decision, which can lead to potentially disastrous results.
Case in point, Randy Tumber is a master designer and builder of landscapes that include beautiful pools and more naturalistic bodies of water. He has won numerous awards, is a widely recognized instructor and mentor, and is a staunch advocate of cross-pollinating the aquatics and landscape industries. By any measure, Tumber has enjoyed a progressive and some would say visionary career.
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Back in 2013, however, his fortunes took a horrible turn when he incurred two injuries, one on a job site and then another in a serious car accident. The pair of incidents sidelined him for more than two years with extreme pain and an uncertain future, with the business left in the lurch.
Desperate to preserve his company, Tumber made a snap decision and sold it to an outside party, who he agreed to train. Without going into specific detail, things did not work out as planned. “When I got hurt, everything came to a halt,” he recalls. “That’s what spawned the idea of selling the business. I was vulnerable and made a terrible decision. Without going into specifics, it’s gone horribly wrong.”
The disconnect, he says, was all-encompassing but ultimately came down to very different philosophies about business, success and life in general. Tumber is dismayed to report that the company he built over four decades now exists in name only. “I spent a year and a half attempting to train the new owner and we just didn’t see eye to eye on anything,” he says. “I shared things it took 40 years to learn, none of it worked. We agreed to disagree and eventually every one of my former employees resigned. So now, it’s a completely different organization that does not resemble the business my family and I built.”
Would planning head before disaster struck have made for a better outcome? “It’s impossible to know,” he says.
Even with careful planning there are transitions that don’t work at all, or more often, fall somewhere between failure and success. Five years ago, industry veterans Merry and Charles Wise were approached by a family-based investment group with an offer to purchase their pool company. They’d been considering retiring, the offer was fair and they felt good about the people who would take over the business.
Because the buyers did not have any experience in the industry, part of the plan included extensive training and a period during which the Wises remained active advising and guiding the new management team, which was headed by the investor’s grown son. Unfortunately, after turnover, the business immediately faltered for reasons the Wises are reluctant to discuss, not wanting to disparage their buyers, who they still view as honest, well-meaning people. Last year, the Wises negotiated a buyback deal and are now back at it, running a revamped version of the business now focused entirely on design/construction.
“We made a good decision at the time,” Merry Wise says, “and it worked out to our advantage in the long run. We were dealing with honorable people and both of us fulfilled a fair obligation to each other. They just weren’t cut out for the business long term, but that was really unknowable.
“It’s something you have to love and be willing to immerse in and sacrifice for,” she adds. “It looks easier than it is. Of course, we would like to have been able to move on, but are satisfied with what we are doing and will probably run it another couple of years and then sell it again if the right person comes along. In the meantime, we are doing just the projects we want to do.”
Going forward, the Wises will approach their next transaction with an increased awareness of the challenges new business owners face.
“You need to be aware of simple things like new owners will likely wind up paying more overhead, at least at first, because they haven’t yet developed the relationships that lead to discounts on things like vehicle repairs,” Charles Wise says. “And I think some people don’t realize the cash flow and reserves you’ll need to get through the slow season and take care of your warranty work. I think it’s easy to get caught up in all the money you think will be coming in without realizing how much goes out to keep the doors open and the lights on.”
Ever the optimists, the Wises have no regrets and are excited to be back at the helm. “One thing that never changes in the pool business is that everything changes in the pool business,” Merry says while offering a cautionary note. “I’d say don’t be so anxious to sell and retire that you sell yourself short. Pay attention to your feelings about people.”
