Many businesses are born from what Michael E. Gerber calls The Entrepreneurial Seizure. These are the moments of inspiration or desperation that drive a person to start a business. Or they cause the owner of an established business to dive in with renewed vigor. If you have ever started a business, or if you own a business then you have probably experienced entrepreneurial seizures throughout your business life. So many of us have experienced entrepreneurial seizures but do we have an exit strategy?
No matter the age of the business or the owner, when entrepreneurial seizures hit they can fuel bursts of business growth and development. They make the business more attractive for succession or sale when the time is right. The trick is to focus these bursts of entrepreneurial energy. Turn them into successful, strategic, and deeply rooted outcomes. They will contribute long-term value to the organization rather than activities that only bloom for a season.
Have an Exit Strategy
Regardless of whether you have a start-up or a mature business it is important to ask, “What is the exit goal for my business?” According to a BDC study:
- 62% of entrepreneurs are 50 years or older
- There are 100,000 fewer entrepreneurs in Canada than in 2002
- Entrepreneurs leave their business due to retirement, personal/family reasons, financial difficulties
Each of these is a valid business succession goal. And each of these outcomes requires separate defined strategies and processes to be successful. Each requires sufficient time to maximize the financial potential of the business succession strategy and to minimize the tax implications.
Clarifying business succession goals is an obvious and urgent concern for older business owners who are starting to contemplate retirement, but what about younger entrepreneurs and start-up owners? Most new entrepreneurs are between 20 and 40 years old. So, define your exit strategy goals even if you are just beginning your business.
It is important to know your succession goals for your business because they will help guide your business strategies and decision making so that you will continue to build value into your business. The process of building value in a business over its lifetime is an integral part of the process of achieving a successful succession or sale.
Contact one of our business coaches for help with your business strategy, leadership and growth goals. Each of these will help you establish a viable exit strategy.