Never mind Brexit, let’s turn our attention to exit.
You probably think the desire to exit your business depends on the size and age of your company. After all, if you’ve been going for just a few years you may have a lot more growing to do and think it’s too early to sell. Whereas if you’ve been around awhile, you may believe it’s time to leave the table and cash your chips in. But, in our experience, it’s not the age of the business, but the age of the owner, that has the biggest impact on exiting.
Here’s what we found:
Owners between 25 and 46 years old.
Twenty and thirty-something business owners grew up in an age where job security didn’t really exist. They watched as their parents got downsized or packaged off into early retirement, causing a somewhat jaded attitude towards the role of business in society.
Business owners in their twenties and thirties generally see their companies as a means to an end, not the be-all and end-all. The days of a job for life are now dead.
Many will expect to sell in the next five to ten years. In the same way that their peers have a new job every three to five years; business owners in this age group often expect to start more than one company in their lifetime.
Business owners between 47 and 65 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 reasonable pension.
Many of the business owners we speak to in this generation think of their company as less of a profit centre, and more as part of a community, with themselves as a community leader.
Too many boomers, the idea of selling their company feels like selling out their employees and their community, which is why so many CEO’s in their fifties and sixties are torn. They know they need to sell to fund their retirement, but they agonise over where this will leave their loyal employees.
Business owners who are 65+
Older business owners grew up in a time when hobbies were impractical or discouraged. You went to work while your wife tended to the kids at home. Today, however, more than half of businesses are started by women. But thirty years ago business life was quite different.
With few hobbies and nothing other than work to define or drive them, owners in their late sixties, seventies and eighties can feel lost without their business, which is why so many refuse to sell or frequently experience depression or loneliness after they do.
Of course, there will always be exceptions to the rule, but we’ve found that – more than your industry, nationality, marital status or educational background – your birth certificate is what defines your desire to exit.
But whatever your current age, or desire to sell, it’s worth taking a moment to consider what shape your exit plan is in. Why should I do that, you ask? It’s because, whatever the current state of your business, events can happen very quickly which you hadn’t planned for. What if you suffer health issues, or someone approaches with a very strong offer, or you fall out of love with your business, or you have a major falling out with your partners, or a major client leaves, or there’s a downturn in your sector, or you need to find a large sum quickly? All of these are common events which can happen at any time. That’s why it’s worth asking, whatever your age, am I exit-ready?
To see how prepared you are BGI has a scorecard known as Pre-Score. In just eight minutes it will explore the four key areas for a successful exit. To complete Pre-Score click here.