Unless you’re Deadpool, you’re likely not immortal. And despite all of us knowing this far too well, it doesn’t exactly jumpstart our desire to tackle anything that isn’t happening in our immediate future.
What many business owners fail to realize is that the most important thing isn’t knowing when you plan to leave your business, but rather having a formal exit plan in place for whenever the time comes and you choose to do so.
Regardless of how critical having a succession plan is, nearly 50 percent of owners who want to sell their business at some point have no exit strategy. At all.
Here are the 3 top excuses business owners use to delay planning for their exit and why the sooner you start to plan, the greater chance of ensuring a solid financial future for both yourself and your business:
1. You don’t think you need a formal plan in place
As the one who started your company, you probably don’t think that anything can, or will go, wrong. But what happens to your business if something were to happen to you?
Owners are often so focused on running and trying to grow their business that neglect to think about life after their business. Without an exit plan in place, who will, or has the capability, to fill your shoes and run the business?
A formal plan enables business owners to map out what they want to accomplish by exiting, including personal and financial goals, who they want to sell the business to, and what kind of advisors are needed for support during the process.
2. Creating a plan is too complicated
It’s understandable why so many owners drag their feet when it comes to creating a plan to sell their business: it’s complicated. An exit plan is a lot like building a house; it’s a complex process that often takes longer than initial expectations, requires support from various experts, and isn’t something that can be completed in a few hours.
For most sellers, the exit planning process can take years, especially when you include business advisors and attorneys, finding the right buyer, and any additional time needed to minimize risk and increase the value of your business.
The right advisors will help you better understand the process and are able to guide, support, and assist you from beginning to end to ensure you get the best value for your business.
3. You’re not planning on leaving the business any time soon
When most of us plan a vacation, we book it months in advance. And despite having weeks and weeks to get ready for our trip, most of us are guilty of waiting until the very last minute to pack. Why are we such creatures of bad habits? Because putting off tomorrow what we don’t want to do today seems easier.
As a business owner, you know that at some point in the future you will leave your business, whether leaving the business means you want to sell it, pass it down to a family member, or any number of options. But when you have no set time frame determined, you will continue to push the planning further and further out into the future.
Too many owners think that finding a buyer to sell their business to will be easy. Unfortunately most also fail to think of what happens if there are no interested buyers.
A formal succession plan will help to ensure you’re setting yourself up to maximize the sale or value of your business. This also means understanding what the current value of your business is versus what you would accept or need to achieve your goal. There’s no better time to start planning than now.
Whether you are in the early stages of the exit planning process, have yet to develop a formal succession plan, or don’t know where to begin, we recommend seeking the advice of trusted experts and advisors who can help guide you through the process. Contact us today to find out if your business is equipped to survive your exit.