As a business owner, likely the largest financial and personal decision you will make in your life is exiting your business. Successful exit strategies follow two concurrent paths. The business improvements path and your personal and financial planning path. Failing to consider and plan for both paths equally will cause problems to arise in your life and your business.
As a business owner, you spend the majority of your life working in your business. According to Forbes, "nearly one quarter (23%) of business owners take fewer than two vacation days annually." Work envelopes every aspect of a business owner's life. Even on vacation, which is meant to be a break from work, 75% of business owners still conduct business activities. In order to have a prosperous exit, an owner must spend as much time working on their personal life as they do their business.
Owners like to have their stamp on every aspect of their business, but most do not realize how detrimental this can be for the success of their company. A business will fail if it is dependent on any one person's individual successes. So, if you are an owner and find yourself working late each evening, spending hours on the weekend troubleshooting problems, and taking time away from your family on vacations to handle a work crisis: your business is too owner-dependent to succeed after your exit.
Instead of working in your business, as an owner, you should spend time working on the business to provide the most value. The best way to grow value in your business is for it to run independently from the owner. Investing time and resources to train leaders in your business ensures they will run your business well after your exit.
On average 30% of our lives, or 25 to 30 years, is spent working. Business owners, and in particular, Baby Boomer business owners, spend even more of their lives working. It is no wonder that thinking about exiting your business is the source of stress for many business owners. The thought of living your life without your business as the focal point is almost unimaginable.
Without planning for your next act after leaving your business, you will never feel fulfilled personally. If you exit your business at 60 or even 70, it is likely you will live another 20 to 30 years. It is important to have a vision for what you are going to do with that time. Having a full and complete exit plan that considers your business, financial, and personal needs is crucial for a profitable business exit.
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