As a business owner, it's easy to get caught up in the day-to-day operations of running a company. However, one thing that should never be overlooked is exit planning. Unfortunately, many business owners neglect this crucial aspect of their business, which can have disastrous consequences for everyone involved.
Not having an exit plan is one of the most selfish and destructive things a business owner can do to those they care about, including family, employees, customers, suppliers, and the community they live in. When a business owner fails to plan for the eventual sale or transfer of their business, they are putting the financial security of these people at risk.
Family - For many small business owners, their company is their family's livelihood. If the business suddenly shuts down or is sold without a plan in place, it can leave family members without a source of income. In some cases, this can lead to financial hardship, strained relationships, and even the loss of assets such as homes and retirement savings.
Employees - Employees are the backbone of any successful business, and they are often the ones who suffer the most when a company fails to plan for its future. If a business suddenly closes its doors, employees may be left without jobs, severance pay, or other benefits that they were counting on. This can cause significant financial and emotional distress, and it can take a long time for them to find new employment.
Customers - Customers are another group that can be severely impacted when a business fails to plan for its future. If a company suddenly shuts down, customers may lose access to products or services that they rely on. They may also lose money if they had prepaid for goods or services that they will never receive.
Suppliers - Suppliers are often overlooked when it comes to exit planning, but they can be severely impacted when a business closes its doors. If a company owes money to suppliers, they may be left with unpaid bills and no way to recover their losses.
Community - Finally, the community in which a business operates can also be impacted when a company fails to plan for its future. A sudden closure can lead to job losses, reduced economic activity, and other negative impacts on the local economy.
Unfortunately, the statistics don't lie. According to a survey by the Exit Planning Institute, two out of three small businesses do not sell, they just shut down. This means that the vast majority of small business owners are failing to plan for the eventual sale or transfer of their company, which can have disastrous consequences for everyone involved.
In conclusion, it's crucial for business owners to take the time to develop a comprehensive exit plan that takes into account the needs of their family, employees, customers, suppliers, and the community they live in. Failure to do so is not only selfish, but it can also be destructive to the financial security and well-being of those who depend on the business for their livelihood. So, take the time to get the help you need to plan for the future of your business and the people it serves.
Chief Transformation Officer
March 18, 2023