In your 50s, 60s or 70s Without an Exit Plan?

I hear it more and more coming from Baby Boomers. This question is often posed casually: “So what do you think, should I start my exit plan 2 years ahead, maybe 3 years ahead?”

They often ask knowing the answer. They are trying to make themselves feel better because they haven’t created an exit plan and they know they should have started it long ago. If I respond that waiting until 24 months ahead of sale is ok, they can let themselves off the hook for not having an exit plan or succession plan in place.

I hear from business owners every day.
  • Some say they are tired and would like to get out. They do not want to put in much more time or invest in building the value of the company. Yet, they are not satisfied with what it is worth today.
  • Some in family businesses have put off building a succession plan for a generation to generation transfer. They may feel they have time, or they may feel that their children (children often in their 30’s and 40’s) are “not ready yet”. They may fear losing an income stream as they transition out of the business.
  • Some are simply working the business, taking no time to develop an exit plan that could dramatically increase the value of the business when it comes time to sell.
If any of these ring true for you, there are many potential solutions to address your concerns and situation. Take a first step and have a conversation with all involved. A good advisory team can help guide those exit plan discussions and provide an objective, experienced perspective. There are so many business exit options.

If you do have just a few years, there are a number of things you can do to optimize your exit and get everyone on the same page. But “2 – 3 years” is NOW, especially if you are a business owner in your 50s, 60s, 70s or older. You have heard when talking about stocks that you can’t time the market. It’s the same thing for your business. And, remember, the sale process itself can take 6 or 9 months to a year or more from start to finish.

There will be a downturn in the market. Getting caught in that next downturn will likely reduce the value of your business. Perhaps more importantly, it could keep you captive in your business for another few years as you rebuild. 

Questions to ask yourself:
  • Do you know the value of your business? Don’t rely on a value that is some industry multiple or that sounds reasonable or what you’d like. Get professional assistance. This is your life, livelihood and retirement.
  • When do you want to be completely or mostly out of the business?
  • Can you wait out the next downturn? If you are thinking of a 2- to 3-year timeframe, what if the economy slows down? Can you wait another few years to rebuild the value of your business? Or are you willing/able to walk away with less money?
  • Do you have a solid plan for what you will do after your exit?
By the Way, It’s NOT all about YOU!
Without an exit plan, you are not just risking your own retirement or next phase of life. You are putting in jeopardy your spouse, children, their families, your employees, their families and more.

The message is simple: work with your advisors now to get a good understanding of your situation. The more informed you are, the better positioned you will be to create an exit plan that works for you, maximize value and minimize risk. You will leave the legacy that you want, not what others want. You will create your future!

Get Started on Your Exit Plan

If you haven’t begun to plan, get on it! Get a business valuation done, build your advisory team, start on building business value!

Need to Get an Idea of Where You Stand?

David Shavzin, CMC
The Value Track
Succession Planning / Exit Planning, Building Transferable Value for Sale
Atlanta, Georgia
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