Are you a Baby Boomer reluctant to plan your exit from your business?
In Rockelis' day-to-day, we often talk to business owners reluctant to think about retiring. Despite the best advice from their friends and family, these 50- to 70-year-olds are hesitant to think seriously about how and when they will leave their business and develop a proper exit strategy. So what's stopping them?
Common reasons for delaying departure planning:
It's too early to think about it.
There is never enough time.
Not sure where to start.
Not sure how much the business is worth.
From our perspective and experiences as advisors, other Boomers' concerns include:
The inability to disconnect from the business.
Worry about what would happen to their employees.
Lose their status.
A family member is not yet ready to take control.
The fear of the unknown: What will I do with my time?
These are all very valid reasons, as it is a truly important decision with potentially large financial implications. It's hard for a business owner to sit down and start thinking about their exit, but they're not alone!
The earlier you start, the better
The sooner you start thinking about how you want to disconnect from your business, the better off you'll be. Give time to understand and expose the available options. We recommend that you plan your exit strategy three to five years before you want to leave, giving you time to increase the value of assets and get the most reward for your years invested in your venture.
How to get started Review your position. Ask yourself:
When would you be financially and personally ready to leave?
Are you financially prepared to leave to support your future lifestyle?
How involved are you in the day-to-day operations of your business?
Are you mentally prepared to leave the business?
When would your business be ready for you to leave?
What will you do with your time when you are no longer in charge of the business?
Do you see your business as a "job" or as an "investment"?
Do you have family or management team who want to take over your business? Do they have the skills or ambition?
Do you know the value of your business?
Find the right people.
Involve the right people to support and guide you through this final stage of your business journey. Go to a business advisor who has experience increasing the value of business assets in preparation for exit, succession, or sale. Your plan should minimize risk, reduce time, and successfully achieve your goals for your business and your exit. Remember that leaving your business doesn't have to mean selling it either. There are different options, such as entry or exit from management, training of an intermediate management or succession.