94.4% Business Owners Won’t Get It

Did you know out of the 100s of thousands of business owners that will decide to sell their business, only 6.4% will sell and only 5.6% will sell for what they desired to get for their business? Why is that?

I am 100% confident you will, at some point transition out of your business. Whether it’s on your terms or because of an unplanned event, it will happen, it’s just a matter of when.

There are multiple reasons that business owners decide they want to transition out of their business including personal exhaustion, ready for something new, retirement, health, divorce, buyer interest, the economy, struggling business, and death. Some actually prepare for it (21%) and some don’t (79%). Maybe you are experiencing a few of these reasons right now, but selling feels out of your control, but I am here to tell you that roughly 50% of all business exits are involuntary and are forced by dramatic external factors that are out of the business owner’s control. But there are two things that are in your control. That includes your attitude you have about planning for your imminent exit and the actions you take to be prepared.

Believe me, I understand that you may be thinking:

• the business is demanding so exit planning isn’t a priority right now, or
• the business is doing great, everything will work out in the end when you are ready, or
• you aren’t ready to leave your business right now, or
• you don’t believe there is anyone that wants to buy your business, or
• you just feel stuck and don’t want to think about it

Planning for your exit BEFORE you exit is just good business strategy.

It’s like building a house. You wouldn’t build a house without permits, blueprints, money, and the skills workers to build it, would you?

Let’s play a little “what if” scenario.

What if…. you had a life-threatening event occur TODAY and your Doctor told you that you MUST exit your business tomorrow, are you ready?

Do you know what it takes to be ready?

Would you want the stress of trying to figure out what it takes to get ready? Or would you be happy it is one less thing for you, your family, and your staff to figure out?

The good news is that I am going to share with you tips on what to include in a well-thought-out exit strategy. This plan would include what you need to plan for how to exit from your business not only in a perfect scenario, but also in a worst-case situation. The following scenarios that force owners to exit their business hurriedly, and they often leaving value on the table (that’s the 94.4% of the business that want to sell). They are often referred to as the 5 D’s:

• Death
• Disability
• Divorce
• Disagreement
• Distress

Many often think that a Will addresses the needs upon the death of an owner. If your partner or spouse passes, do you have the ability to continue their job at the level they were performing it? If you’re put in a position where you need to stay home to take care of a suddenly sick or disabled family member, what will happen if you are forced to exit your business due to your inability to come into work? It is important to run through the tough questions about what you want to happen to your business if you have to exit your business prematurely.

Statistics have shown that in the four years following an owner’s death, sales declined 60% on average and employment fell 17%, resulting in a decline the overall valuation of the business. Additionally, two years after an owner’s death, firms are 20% more likely to fail or file for bankruptcy. It is important to have a plan in place to avoid these issues happening to your business in your sudden absence.

So, this year, I ask you to come alongside of me and learn about the options you can incorporate into your 2023 exit strategy.

I’m looking forward to sharing more with you!

Dedicated to your success!

Kim

PS. Knowing when to act and when not to act is a key component in all important decisions. Likewise, knowing when to keep your business and when to sell it can make a significant difference in the success of your exit and your future financial security. Take the following Keep or Sell test and review your answers with one of our advisors to ensure that your timing is perfect.