Posts tagged with: future lifestyle
You know the stakes are high – the highest, since your business is likely the most valuable asset you have and intend to monetize.
Then why do over 90% of all businesses avoid exit planning and do not have their transition plan documented? There is a mythical belief that business owners are invulnerable. There is an apparent universal belief that you can always do it tomorrow, that it’s too early to plan your exit.
But without a plan, you are leaving everything to fate, when time takes its toll. The statistics bear out what I’ve been seeing for years; brilliant successful, industrious business owners are frozen in inaction on this one area of their business that they do not want to address. Even knowing how much is riding on the result (taking care of a spouse, children, grandchildren, other family members, partners, employees, customers, suppliers, and others), they still leave their legacy and their future lifestyle to chance.
In 2007, Mass Mutual did an American Family Business Survey. Their results, seemed to substantiate this lethargy. “Almost a third have no plans to retire, ever; and nearly another third report that retirement is more than 11 years away. Since the medium age of the current leaders is 51, this means that many people plan to die in office…” p44
MassMutual Financial Group, Cox Family Enterprise Center, Coles College of Business Kennesaw State University, The Family Firm Institute, Inc. (FFI), American Family Business, Survey, Study: Family businesses growing steady and strong but face future risks, 2007
Also in 2007, PricewaterhouseCoopers released a report on Canadian businesses succession plans, which found a lack of planning by owners that were 50 and over. They reported that, “many owners seem unwilling to seriously look into options to transition ownership before they are forced, by age or illness, to give up the business.”
The second overall top reason given on both surveys was ‘it’s too time consuming.’
Could this be the trigger point that will help drive owners into action?
As in your on-going operations, succession and transition planning is about business strategy. It is about creating a structure that will help you organize your systems, structure, and processes, which in turn will help you increase the value of the business, and provide you a vehicle to smoothly transition your business to new ownership while you cash out on your terms.