100% of owners leave. One in five has written down how.
The Business Exit Institute asked owners how ready they were. The gap between what owners intend and what owners have written down is the single most expensive number in private business.
Four numbers
In its 2022 owner readiness survey, the Business Exit Institute found that 53% of business owners want to sell or transfer their ownership within the next ten years, and 80% want to stop working in their businesses in that time.
Only 20% have created written plans to transfer ownership.
And 100% of business owners will one day leave their company, whether planned or otherwise.
Those four figures describe the same population. Most owners intend to go, few have written down how, and all of them go regardless.
Why the plan does not get written
It is rarely negligence. An entrepreneur’s identity is interwoven with their business, and letting go — financially and emotionally — is genuinely difficult. Compound that with not knowing when to let go, and indecision starts to look like the most sensible available decision.
Meanwhile the work of planning an exit competes with the work of running the company, and the company always wins, because the company is on fire today and the exit is a problem for a version of you that feels hypothetical.
What starting early actually buys
Wealth planning for this event ideally starts years before the transition, for two practical reasons: it takes time to identify a worthy successor, and it takes time to prepare the company and its employees for a transfer of ownership.
There is a third reason that gets less attention. Value is easier to build than to prove. An owner who starts five years out can still change the answer a buyer arrives at; an owner who starts five months out can only present it.
By having an exit plan, and starting well before one is needed, an owner can prepare for the transition without walking out the door one day and not coming back the next.
Three things, not one
This is why Financial Architects is part of the Q5 Experience™. Q5 addresses three elements that make a transfer successful: the BUSINESS itself, the FINANCIAL strategy of the owner, and the PERSONAL interests and fulfilment of the owner and the next generation.
Most exit advice covers the first. The second is where Financial Architects works. The third is the one owners raise six months after the sale, when the money question has been answered and the time question has not.
Next step
If any of that sounded like your situation, the next move is small: find out which parts of it are actually true for you.
Take the exit readiness check
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The Coordination Check
Ten statements that are either true of your situation today or they are not. Most people tick four.
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The other two.
Why six excellent advisors can still produce one bad plan
Your accountant is good. Your attorney is good. Your investment manager is good. Nobody is wrong, and the plan still doesn’t work. Here is why that happens, and what the missing role actually is.
Read it
What an eight-step planning process actually does to you
Every firm says it has a process. Most mean a sales cycle. Here is what a numbered, finite, repeatable framework changes about the experience — and the one step that never ends.
Read itNext step
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