Boomer Business Owners: Do you have an exit plan?
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As baby boomer business owners near retirement, they should be devising an exit strategy – the plan to exit your business gracefully, to preserve maximum value. If you haven’t done this, you’re not alone. One recent study by White Horse Advisors LLC found that 87% of baby boomer business owners didn’t have a written exit plan.
The usual “strategy,” says Bankrate.com, is “manage til you drop” which indicates the lack of any sort of clear plan. The problem with neglecting a plan is that you will not be able to maintain the value of your business if you drop dead or become disabled. In fact, I can think of lots of things that might happen. It’s not pleasant to think about. Brent Dees (About.com guide for Small Business Information) calls them the “Four D’s: Death, Disability, Divorce, Departure.”
My suggestion: Start thinking about this, consider the Four D’s, and start putting together a written plan. Matter of fact, I should be doing the same thing myself.
3 Comments
Not having an exit plan is like jumping from an airplane without a parachute (usually not a good outcome). There are specific things that owners can do to maximize the value of their business and reduce risks, and taxes when they exit. But it requires planning ahead. Owners who have an exit plan will always have a better landing than those who do not plan. It is a fact that every owner will transition out of their business in one of five ways; 1) sell to a 3rd party 2) transfer the business to insiders (family or key employees) 3) die 4) become disabled 5) liquidate (out of business). Hire a professional to help create your plan and exucute the plan for a better outcome!!
Thanks, Doug, for stopping Small Business Boomers and giving us your tips for an exit strategy. Some good ones to consider.
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