Fit Your Exit into Your Business Plan
When you start-up a business, you are usually so excited about getting the venture off the ground and working out the profit margins; that you really don’t stop to think about the long-term benefit of the business you have chosen.
Through normal business planning, you would also ordinarily only plan for the first three years of business. And in most cases...this as far as any start-up entrepreneur can even hope to think. Now, consider the consequences if you didn’t take that extra step and build in a longer-term view of a future “sellable” value of your business:
Years of Work and Nothing to Show for It
It’s hard work starting up and running a business, let alone growing it if it is really successful in its first three years. Press ‘Fast Forward’ to 20 years from now: you are tired (even possibly bored) and your priorities have changed in life. You are really seeking that alternative lifestyle that affords you a better balance of work and play. For the last five years, you have been under the impression that your business is highly attractive to a buyer and that it will definitely provide the return you are looking for so you can move on to your next step in life. What happens when you find out that you should have done A, B & C years ago – and now the business is really only worth a fraction of what you were hoping it was? (Silent shrieks heard.)
Financial Stress & Burden of Working Longer
The general pattern at the moment (especially in the UK) is that business owners who are getting to retirement age have to keep going another five to six years before they can even dream of retiring. Why? Because when they finally decide they want to retire – they are under the impression that their business will sell in about six months, and that they will get what they think they deserve in the sale value. Unfortunately, the reality says that is not going to happen!
I could write on and on about this subject, it really does break my heart when I see how hard small business owners work and even more so when they don’t take some time out of the hamster’s wheel to assess their position and their future position. You can’t decide at 64 ½ that you want to retire or move on at 65, you really have to have thought about it at least 5 to 10 years before. It takes an average of 2 years to sell your business – from start to finish.
Copyright © 2008 Shelley Pearson.
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