At CMC we speak with many business owners everyday and there is often a reluctance to think about retiring. Despite the best council of their friends and families, these 50-to-70-year olds are hesitant to seriously think about how and when they will leave their business and develop an exit strategy to fit. So, what is stopping them?
Common reasons for delaying exit planning:
- It’s too early to think about it
- There’s never enough time
- Not sure where to start
- Not sure what my business is worth
From a personal perspective, concerns include:
- The inability to disconnect themselves from the business
- Worrying what would happen to their staff
- Losing their status
- Family member not ready to take control yet
- The fear of the unknown – what would I do with my time?
These are all very valid reasons as it’s a really important decision with potentially large financial implications. It is hard for a business owner to sit down and start to think about their exit – but they are not alone!
A UK study suggests 74% of entrepreneurs in the UK risk long-term business success by not giving proper thought to their exit strategies. 72% are still involved in the day-to-day running of the business, yet 39% have no exit plan in place.
Deloitte – Entrepreneurship UK
The sooner you start the better
The sooner business owner’s start thinking about how they wish to disconnect themselves from their business, the better it will be. It gives time to understand and set out the options available.
Here at CMC, we recommend you plan your exit strategy 3-5 years before you wish to exit, giving you the time to increase the asset value and reap the greatest reward for your years of hard work.
Some owners may actually fear the thought of planning their exit strategy as it sounds so terminal. Our Worcestershire Business Advisor commented on this recently, suggested renaming our exit service as ‘professional escape artists’! Sound more appealing now?
How to get things moving
Step 1 – Review your position
- When would you be financially and personally ready to exit?
- Are you financially ready to leave to support your future lifestyle?
- How involved are you in the day to day operations of your business?
- Are you mentally ready to leave the business?
- When would your business be ready for you to exit?
- What will you do with your time when you are no longer running the business?
- Do you view your business as a ‘job’ or as an ‘investment’
- Do you have family or management team that may wish to take over your business – do they have the skills or ambition?
- Do you know what your business is worth?
Step 2 – Source the right people
Get the right people onboard to support and guide you through this final stage of your business journey.
Here at CMC, our business advisors are experienced at increasing businesses asset value in preparation for owners exit, succession or sale. We can help minimise the risk, reduce the time and successfully achieve your goals for your business and your exit. Exiting your business doesn’t have to mean selling it either. There are different options such as management buy in or out, training up a middle management or succession which we can discuss with you.
Read our white paper on ‘Selling your Business‘.
Are you a baby boomer reluctant to retire or exit from your business? Get in touch via the form below, we’re happy to help.