Don’t get trapped by the world of business

A recent survey suggests that 50 percent of business owners over age 50 will exit their businesses within the next five to 10 years. Mostly baby boomers, these owners have achieved their dreams. Independence, freedom and wealth are just a few of the benefits they have realized from business ownership. At the same time, they have survived risk, debt and probably more than one failure.
Now they are managing their businesses through the worst economic turmoil since the Great Depression. A survey by the U.S. Federation of Small Business found that 95 percent of closely held business owners feel significantly challenged. More than one-third indicated that they had cut staff, decreased expenses, and put a freeze on bonuses and raises. They are tired of the challenge and ready to move on.
But, where? For 20 or 30 years, they have focused on their businesses. It is not just a livelihood; their business is who they are. If this is not you, think about a friend. You had a great idea 20 years ago and started building widgets in your garage. They caught on and soon you had a plant with others working with you. The business grew, and soon you were not making widgets but managing people who made widgets for you. Your income and wealth grew and you moved to the Ranch. Life was great, you became wealthy. Today, you are known as Mr. /Ms. Widget. Part of your self-respect is tied up in your identity drawn from the success of your company.
You know there is an end-game, you may no-longer enjoy what you do (most of us were never trained to be managers). You are ready to get out, but you don’t have time to think about it. You may think that junior wants to take over. But, is he/she qualified? Have you ever discussed his/her interest? You may be thinking a motivated buyer will offer you twice what your business is worth. But, how will you know the true value of your business to others? And, have you taken the steps to prepare your business for maximum value?
Deloitte Consulting has identified more than 600 points that drive owner’s value. However, a good exit plan starts with the end in mind. We have identified 185 points that contribute to post-sale success. We call it “Life after business.” Most people spend more time planning their vacation than they do their retirement. But, a successful life after business is much more than just retirement. Wealth created by a sale provides flexibility, allows for commitments to community, and obligates you to the successful transfer of your wealth to future generations. A transfer to children may mean reduced income, requirements for change in corporate governance, and balancing the interests of noninvolved children.
If you’re thinking of exiting in the next five to 10 years, now is the time to start thinking about the beginning of your life after business. Professional assistance will maximize your exit strategy and help you establish a successful beginning.

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