An Exit Plan is Important at Any Age
Your age most likely has a big impact on your attitude toward your business and how you feel about one day getting out. Here’s what we have found about how owners view the need for an exit plan, also known as a succession plan:
Business owners between 30 and 46 years old
Thirty- and forty- something business owners grew up in an age where job security did not exist. They watched their parents get downsized or packaged off into early retirement, causing a somewhat jaded attitude toward the role of a business in society.
Business owners in their thirties and forties generally see their companies as means to an end and most expect to sell in the next five to ten years. Similar to their classmates who have a new job every three to five years, business owners in this age group often expect to start multiple companies in their lifetimes.
Business owners between 47 and 64 years old
Baby Boomers came of age in a time where the social contract between company and employee was sacrosanct. An employee agreed to be loyal to the company, and in return, the company agreed to provide a decent living and a pension for a few golden years.
Many of the business owners we speak with in this generation think of their company as much more than a profit center. They see their business as part of a community and, by extension, see themselves as a community leader.
To many baby boomers, the idea of selling their company feels like selling out their employees and their community, causing many CEOs in their fifties and sixties to feel torn. They know they need to sell the business to fund their retirement, but they agonize over how that will impact their loyal employees, their status in the community, and their family life going forward. This often leads to procrastinating instead of creating an exit plan.
Business owners who are 65+
Older business owners grew up in a time when hobbies were impractical or discouraged. You, the male, went to work while your wife tended to the kids (today more than half of businesses are started by women, but those were different times), you ate dinner, you watched the news and you went to bed.
With few hobbies and nothing other than work to define them, business owners in their late sixties, seventies and eighties feel lost without their business, which is why so many refuse to sell or experience depression after they finally do. The exit plan of these owners need to include realistic plans of how to fill the empty hours and ego needs BEFORE selling the business.
Of course, there are always exceptions, but we have found that more than your industry, nationality, marital status or educational background, your birth certificate defines how you view your exit plan.
These generational, emotional issues swirl about the minds of business owners of all stages, yet the younger owners do seem to have figured it out.
The simple truth is that you can love your business and everything contained within, yet it can’t love you back!
Clouding the landscape with self-centered emotion obscures the bigger goal… long-term security for self and family.
There is case after case of owners holding on to their businesses too long. The result is either being destroyed by a changing market or destroying their personal wealth and jeopardizing their personal long-term security by pouring their money into a sinking business.
Many of these cases could have been avoided if owners strive to maintain a healthy emotional separation between themselves and their business.
All business owners should get involved with hobbies, your community, non-profit organizations, and/or travel NOW, so this is an established support system by the time you retire.
In our experience, the owners who maintain a pragmatic view of their business in the context of the big picture of their lives have the most success achieving the Life Beyond Business™ of their dreams!
Regardless of your age or business expectations, creating an exit plan early is the best way to ensure a smooth transition for yourself and your business.
