Dare to Be Different: Take Your Exit Plan Seriously (A Message to Baby Boomer Business Owners)
You’ve been at it now for 30-40 years, slugging it out in the trenches every day. Serving your customers, managing your employees, building vendor relationships, and so much more. The years are a blur.
When we sit with you in your home or office during our initial discovery meetings, you recount for us your tale of ups and downs, highs and lows, and ultimately surviving and thriving (hopefully). You tell us a story and when we ask, “When did that take place?” Your typical answer is, “I don’t know. A few years back, maybe.” Later on, when we dig into the details the story turns out to be from the 1990s; definitely a “few” years back, 30 years! It’s hard to believe how quickly it’s all gone by.
As a Baby Boomer business owner, you suddenly find yourself facing decisions that once seemed impossibly far down the road. Too many of you haven’t prepared for this moment because you were growing your company during a time when business culture had an unspoken taboo about discussing your business exit or retiring. Maybe it felt like it was in poor taste, greedy, or tempting fate–for whatever reason, you probably never sat down and proactively planned your own exit from the company you worked so hard to create. These types of strategic questions were kept hidden from even top managers, often never discussed with your spouse, and mostly they just bounced around in the back of your head.
There is a huge cost to this taboo.
It means that too many baby boomer business owners are losing out on millions in potential exit proceeds from being well prepared to sell.
We just met with an awesome owner the other day. All he knows to do is work. Up at 4 am. Working on other projects all weekend. For years, he had a second business to manage every Saturday and Sunday. Never a day off. He just works. Along the way, the business reached a certain scale and profitability that he was happy with, and prior to meeting us his honest consideration was just to shut it down and liquidate the business. After our intro conversation, he realized he was sitting on huge untapped potential. He could hardly believe that he’d been ready to walk away for nothing but the liquidation value of the company’s equipment.
Based on the results of EPI’s latest State of Owner Readiness report, this story seems to still be the norm amongst many Baby Boomer business owners. Baby Boomers still remain the worst prepared for an exit. While Gen X, Millennials, and Gen Z are largely taking a “built-to-sell mentality” to their businesses, Baby Boomer statistics keep me awake at night.
Although 77% of Baby Boomer business owners would like to exit within 10 years and 57% within 5 years, with regard to exit strategy:
14% have given it a top priority
33% have given it high attention
39% have given it at least some attention
Only 22% indicated they’d undertaken a value enhancement or preliminary due diligence project:
#1 reason (excuse) – felt they had no time
#2 reason (excuse) – felt it was not needed
13% have a written personal exit plan
15% have a written transition plan for the company
35% have a written financial plan
The good news is that these are just statistics and they don’t have to apply to you. As an entrepreneur, you are full of grit. You don’t mind being different. You’ve been fighting the system your whole life. You think differently and sometimes it takes the rest of us time to catch up. So it’s worth looking at the next phase of your business in a new way and getting proactive about crafting your exit strategy. You’ve worked too hard to just let it fade away.
One of our favorite sayings in our business is: “It’s never too early or too late to start exit planning.”
It’s not too late for you either. Whether you have a few months or a few years before your desired exit date, you can start today. We have many examples of companies where our advice and implementation assistance have driven substantial value in even a small amount of time, cementing legacies for self-made business owners deserving of a reward for their decades of effort.
If you are a Baby Boomer business owner in your 60s or 70s, pay attention to this important final chapter in your entrepreneurial journey. When you were young or even mid-career, it was easy to act like you’d live forever. But at this point in your career, it’s time to shake off the statistics, ignore your naysayer contemporaries, and take a lesson from the younger generations. You deserve to capitalize on all your years of hard work, and while it may be uncomfortable to think about, we promise it won’t be as painful as you might think.
We are on your side and will walk you through the process every step of the way, so get in touch even if you’re not sure if this is a possibility for you. It could all start with an Exit Audit or just a free consultation. It’s time to start getting educated so you can nail your exit on your terms.
