The stupid death of design firms

It really hit me hard when some of the top design firms in town closed their doors. I won't name them- since my intent is not to point fingers- but it really pointed out to me how little planning the owners did- how little they thought about transitioning their firm. Just the other week, I had lunch with an owner that had to close his doors- with little to show for 20 years of work.
This is such a good example of how designers often do not think like business owners- who plan ahead for how they want their businesses to end. As a business owner, a studio may be the single biggest financial investment that she owns. I know that Grafik is my biggest financial investment- and after years of reinvesting in this firm, the last thing I want, is for my investment to pay off zero.
Yet, that is exactly what is happening in our industry. Owners do not plan, they may think they are going to cash out big- but have no idea who will buy them, what their firms are worth, how payouts will be structured, if a merger or acquisition will actually net $$. They have no idea how long it takes- it is a process that in its simplest form could take a year- and in my case is already going on 10 years....

Transitioning ownership is not as easy as signing over a check. It involves careful mentoring, training, and a gradual turning over of power and responsibility. I know that my sabbatical is just another very deliberate step in planning for the day- far off- when I no longer work at Grafik. And that day is probably anywhere from 6-10 years away. Yet I have been looking at this since I added partners. In fact, the decision to add partners was expressedly tied in to my transitioning out.... Weird but true.

I know I plan ahead- always have. And it drives my family crazy. It is probably the same impulse that makes me get to the airport 2 hours early for a flight that also had led me to think about exiting Grafik when I was just starting it. But I want and financially need Grafik to be strong for years after I retire. The firm is not only my legacy- but it is the financial instrument that will make retiring possible. 
by JudyK