Persistence has a double edge. When you start a business and throughout its life span, persistence, tenacity and determination help you succeed. Without these traits you would have given up when the going got rough, as it inevitably does. Whether it was because the bankers turned you down, employees quit, or you just didn’t feel like making another customer call, persistence helped you push through the resistance.
Optimists are more likely than pessimists to be persistent in the face of challenges. However, unbridled optimism can be deadly as Dr. Daniel Kahneman in his book Thinking Fast and Slow points out:
“The chances that a small business will survive for five years in the United States are about 35%. But the individuals who open such businesses do not believe that the statistics apply to them. A survey found that American entrepreneurs tend to believe they are in a promising line of business: their average estimate of the chances of success for “any business like yours” was 60% – almost double the true value. The bias was more glaring when people assessed the odds of their own venture. Fully 81% of the entrepreneurs put their personal odds of success at 7 out of 10 or higher and 33% said their chance of failing was zero.”
If you’re thinking of transitioning your business, you’ve exceeded that five-year mark. You are persistent and successful in spite of the odds, which has probably fuelled your sense of confidence and optimism – factors that affect persistence. Kahneman suggests this means you are more at risk of overestimating the likelihood of selling your business.
US stats from Andrew Rogerson’s book, Successfully Sell Your Business tell us that companies with fewer than 10 employees (80% of all businesses) have a 1 in 5.5 chance of selling their business. Even those with over 100 employees have only a 1 in 3 chance of selling. But if I asked 100 entrepreneurs if they expect to sell their business, I predict that 81% would put their odds at 7 out of 10 – not 2 or 3 out of 10, which is more realistic.
Should you give up? Not at all. But you can strengthen both the validity of your optimism and rationale for your persistence:
- Get ready. The prepared and strategically positioned business is more likely to sell.
- Start sooner rather than later. There’s no down side to being ready.
- Have a back-up plan. In case you’re not one of the fortunate who sell, do you have enough savings to retire?
- Get a realistic valuation of your business. Don’t overvalue it and miss an opportunity to sell.
Persistence fuelled by optimism is a positive force. Be sure to put the foundation in place so that it’s justified and not foolish speculation or wishful thinking.