In prior posts, you’ve read us describing the steps to successful Exit Planning:
- Protect your business and its cash flow
- Grow its revenue and profits
- Prepare for exit by addressing the three legs of an entrepreneur’s stool:
- Business planning
- Financial planning
- Personal planning
While that represents a simple 3(ish)-step plan, we haven’t spent much time address why actually doing this is so very difficult. Over the years, we’ve seen many reasons why this is so, and we thought we’d share the most common ones; perhaps some (or all) of these may resonate:
- Emotional Attachment – your business is like your baby; we get that. Letting go of it can be just as scary as the thought of someone else raising your young child. Just like most people struggle to draft their wills and estate planning documents (because thinking of the latter scenario is just too painful), so too do entrepreneurs struggle when it relates to thinking about their business’ existence without them at the helm.
- Transaction Size – the sale of your business often represents the largest transaction in your life; that’s because the business is likely to be the largest financial asset on your balance sheet, and getting that value right can be a daunting task.
- Family Dynamics – even if your family is not involved in your business, they still are involved in your business. You might have to read that a second time to see what we’re saying, but once you get it, you get it. Your spouse, partner, kids, parents, dog, etc., might not have a say in the day-to-day management and choices that you make, but they sure are going to want to know how your stepping away is going to impact them.
- Urgent versus Important – have you ever prioritized the urgency of what you could be doing over the importance of what you should be doing? If so, then you’re not alone; we all do it, and it often gets in the way of progress.
Thinking about Exit Planning requires time and energy away from working in the business, and a focus of working on the business.
The list could go and on, and we think you get the idea; there are so many reasons to not think about Exit Planning. We’ll leave you with just 1 reason (for now) why thinking about your Exit now is to your benefit: Exit Planning is just good Business Planning. All the steps you would take to get your company ready for a potential sale are the same ones that you would take to enhance profitability, employee morale and retention, and your own personal cash flow and wealth building.
Not sure where to start? Reach out to us; our firm has helped hundreds of entrepreneurs figure out their pathway to success…