Am I Too Young to Think About Exit Planning?
We all think we’re invincible. We get sucked into the day-to-day work in front of us and forget that this can’t go on forever. This is especially true for small business owners who often don’t have the time (or make the time) to think about planning to exit the business. But in many cases, owners don’t get the chance to voluntarily exit. Instead, an exit is thrust upon them by a sudden disability or even death.
After working with hundreds of small business owners, I’ve learned it is never too early to start planning for an exit. And what happens if you don’t? An unplanned exit will cause emotional and financial damage to your family, your employees, your customers, and even your community.
The proverbial “hit by a bus” scenario
I remember sitting down for a meeting with the owner of a local manufacturing business, along with his wife who works alongside him. They were in the midst of updating the company’s technology system and focused on growth, not an exit. In my typical straightforward style, I asked him, “But Jim, what’s the plan if you get hit by a bus and you don’t make it in next week?” His wife turned to him and said, “Yeah, Jim – what’s the plan? I said I would help you with the business, but I certainly don’t want to be left with a mess on my hands!”
That conversation inspired the beginnings of their business continuity plan. Our advisors at Legacy Advisors Network helped fill in the details on what to do if Jim gets hit by that proverbial bus – including who to call, lists of key employees and key customers, and instructions on how to keep the company running until it can be sold.
Start when you’re not “under the gun”
One of my clients owns a specialty distribution company. Although the owner is only 52, he realizes there is no convenient succession plan in his family. None of his children are interested in running the business. But he values his employees and customers, so he wants to have a plan if he is unable to run the business.
“My family and employees need to be taken care of, and we need a way for the business to continue to serve our customers, pay the bills, manage payroll and more,” he told me. “I’m not an expert in succession or exit planning so I need help. Whether something unexpected happens to me or not, I still need an orderly transition of the business to future owners.”
This is a man who cares deeply about his business – but he says it’s about more than that. “It’s provided people with a good living and our suppliers, vendors, and manufacturing partners rely on us. It will really hurt them if we have any kind of interruption in our business. I’m only 52 years old now, not 65 or 70. So I’m not under the gun. I’m trying to start early and have an orderly transition.”
That kind of decision-making has an enormous impact—on you as an owner and on the people depending on your business. With a detailed business continuity or exit plan in place, you can sleep well at night knowing that if anything happens to you, your business will survive, and your family, employees and customers will be protected from a potential disaster.
So, if you’re wondering, “Am I too young to think about exit planning?”—the answer is NO.
It’s easy to get the conversation started.