Why You Should Begin Your Exit Plan Now
Every business owner will exit their business. No one is immortal. The real question is will you exit your business by design, default, or not at all. Here is a statistic to consider, 50% of all business transitions are related to death, divorce, disability, dissolution, or disagreement. These events are generally random. If there is not a plan in place to deal with these issues, it is likely that you are not going to be happy with the solutions available to you.
So, let’s say you have a partner who unexpectedly dies as a result of an auto accident. His widow has suddenly become your partner. She is a sweet lady, but she has trouble managing her shopping habit and is ill-equipped to help you manage the business. You would love to buy her out, but she thinks the business is worth much more than the bank is willing to lend you. Since you had no plan in place, you find yourself in a very bad situation.
Another scenario could be that after a lifetime of struggling with customer issues, you have finally had enough. Life is too short to spend it doing something that drains your soul. You decide it is time to sell. You call the Cheif Financial Officer that has helped you keep your finances in order. You ask him what your business is worth and his response is nothing. “How could this be?” you ask. He says, the business is entirely dependent on you. You are responsible for sales, customers reach out to you when there is a problem, and you have no one else in the business that can do what you do. The unfortunate truth is that this creates a risky investment for any potential advisors. Your chances of getting out are slim. You are about to join the ranks of the 80% of business owners you are unable to sell their businesses.
The thing is, you can create an alternate reality. If you take the time to learn about the proper way to structure your business so that it is an attractive investment for a potential buyer you can create a smooth transition into the next chapter of your life. Our purpose is to help you create the best transition for you and those close to you.