If You Fail to Plan, You Plan to Fail
Most business owners do a terrible job when it comes to selling or otherwise transitioning from their businesses. Consequently, they are leaving tremendous amounts of money on the table. Consider the following statistics from a recent Exit Planning Institute (EPI) survey.
- 80% to 90% of most business owners’ financial assets are bound up in the business itself. Given the significance of this asset in the average owner’s wealth portfolio, the ability to monetize this wealth at some point will have a significant impact on the owner’s financial security and lifestyle once he or she exits the business.
- 50% of all business exits are not voluntary—that is to say, not on the owner’s terms or timeline. One of the five D’s (death, disability, divorce, distress, disagreement) is most often the contributing factor.
- 75% of businesses that go up for sale, never sell.
- 70% of family businesses don’t survive past the second generation.
These statistics are alarming. Good exit planning asks and answers all of the business, personal, financial, legal, and tax planning questions involved in transitioning a business by combining planning, strategies, and concepts with process. One last statistic from the survey–83% of all business owners do not have a written transition plan in place. Benjamin Franklin said it best, “If you fail to plan, you are planning to fail.” The knowledge and tools exist to make sure that you end up on the right side of the above statistics. Now is the time to get educated.
A True North Mergers & Acquisitions advisor will guide you through the process of transitioning your business and will answer all of the questions you have. Writing a plan down and contemplating all of your options will ensure you transition efficiently and that you get the most value out of your transaction.
Brent Engelbrekt is a Senior M&A Advisor with True North Mergers & Acquisitions. As a past business owner, Brent comes with a key understanding of the business sales process, knowledge acquired first-hand as a principal in several successful business and commercial real estate transactions. Learn more about Brent and his credentials by clicking here. Email Brent directly at email@example.com