Robert dePalo's recent article (You will die; Business Planning for Unexpected Death) paints an all too typical story of a business owner who has to be told he's dying before he acts on preparing for his exit. In the end, as you'd expect, the outcome is not the personal or financial legacy he truly wanted for his family, his people or his customers.
A recent EPI survey found that only 8% of business owners have a documented exit plan, which explains why only 1 in 10 have a great exit. Also, most owners have 80-90% of their wealth tied up in their business. Yet the only certainty in life is death, so why are we so poorly prepared for an exit that we know will come someday?
75% of business sales are triggered by a personal crisis or unsolicited offer. Which begs the question, what does it take to make us act in preparing for a great exit? Failing to plan is the same as planning to fail. Think about what that means for your retirement, your family and all the others who depend on you.
There is no "right time" to get started, but the more time you give yourself to plan and execute on your business transition, the greater your chances of success and the greater the payout you can keep when the time is right. There is one significant date in the exit planning timeline, which is 2 years before a deal, which is a critical requirement in tax planning for some exit strategies. Ask a tax specialist because it is the money you get to keep after tax that will determine your lifestyle, not the EBITDA multiple you negotiate on.
Regardless of your timing, the key to a great exit is to grow the leadership, talent, capabilities and capacity in the business that is self-sustaining and can grow the business regardless of your level of involvement. Building a great business that can thrive without you the owner puts you 100% in the driver's seat to keep, sell, merge, acquire, etc. on your terms. The sooner you get started in making that happen the more fun you'll have in your business and the greater the reward for everyone.
I’d like to hear your thoughts on this, please share in the comments and pass it on. If you want an outside opinion on your exit readiness and the things you can do to maximize the sale value, we have a pro-bono exit readiness assessment you can do in 5 minutes, that will give you some great insight, at no cost, no risk and no obligation. MExit – Value Builder PREScore - https://score.valuebuildersystem.com/prescore/proactv-business-solutions-inc/robert-welke #growthstrategy #growthtransformation #scalingup #transformationalchange #transformativeleadership #culturaltransformation #traction #10xgrowth #exitplanning #exitexecution #successionplanning #transitionplanning #esgconsciousbusiness #esg #sellingyourbusiness #exitplanninginstitute #valuebuilders #capitaliz #quistinsights @Robert Welke @John Higgins @Gary Ellis @elizabeth McCrae @jeffrey Cullen @chuck Prenevost @exit planning institute @Phil Hammond @Joe Markovitch