Insights & Info

Insights > Why are You Procrastinating with Your Exit Plans?

Why are You Procrastinating with Your Exit Plans?

By Generational Equity

Procrastinate Exit Plans

The data is pretty revealing, and survey after survey tells us the same trend: Most business owners believe that exit planning is important, but few actually do it.

Why?

Selling a privately held business is far different than doing the same with a large public entity. Although emotions come into play under both scenarios, the sale of a family business is far more psychologically challenging than anyone can imagine until they go through it.

I once had a dealmaker tell me that he saw himself as more of a family counselor/marriage counselor than a financial guru. He had just closed a deal and had spent the last three months of the process just keeping the husband and wife together so the deal wouldn’t fall apart. Sadly, once the transaction closed they did part ways, but they did so in a much better financial position than they would have been in if the divorce had scuttled the deal.

This is just one example of how important it is to thoughtfully consider the timing of your exit and to start the process as early as you can so that you, your partners, and family members can all start internalizing the concept of an eventual partial or full exit.

We meet with business owners weekly and procrastination is one of the major hurdles we have to help business owners overcome. One thing to keep in mind: Starting to plan your exit doesn’t mean you must exit right away. In fact, since the process is a journey, not an event, you shouldn’t even think about rushing to close a deal. 

Unfortunately, that is the trap too many business owners fall into: By procrastinating they often end up running a fire sale, accepting the first offer they get, at terms often not favorable to them. 

What Kind of Business Owner are You?

Remember, there are two types of business owners:

  • Those that HAVE to sell
  • Those that PLAN to sell

Danielle Fugazy, one of our favorite authors with Axial, recently published a piece that covered the issue of business owner procrastination. This is how a dealmaker she interviewed put it:

"There can be a hesitancy to run a sale process for a variety of reasons. The common psychology is to procrastinate and unfortunately often it is too late by the time owners decide to sell. The best time to sell is when a business has an upward trajectory and there’s a runway for growth and a reason to be optimistic."

"But that is a hard time to walk away. A lot of owners can’t, and they stay on too long and they wind up going to market with a challenging story rather than a growth story. But I talk with a lot of owners who have sold and then are sorry they didn’t do it sooner. There is life after a sale."

I have bolded that last sentence above to emphasize a point that I hear all too often when I meet with our clients post-sale: I had no idea how much life I was missing out on because of the daily pressures of running my business. In fact, here are a few of them discussing the realities of life post-close:

This is just a small sampling of clients who nearly unanimously say the same thing to me: "I am so glad that Generational Equity was there to guide me through one of the most emotionally and psychologically challenging processes I have ever been through".

As one owner once told me, "I was great at running my business but I had no idea how hard it was going to be to actually find a buyer and close a deal. I couldn’t have done it without Generational Equity."

What is Your Reason?

Now many of you may have what you consider "valid" reasons for procrastinating regarding your exit plans. For some it might be that you are too busy running the business to even consider an exit plan. Others, it might be that you feel you are too young and you can plan later. Some may believe that you should wait until the "time is right" to begin looking for a buyer.

No matter what reasons you have, consider this: Odds are good that if you continue to procrastinate, external forces may cause you to move much quicker than you intended. Here again is one of our clients talking about his wake up call:

Sadly, history is littered with business owners who put off exit planning only to be forced into it, taking the first (and only offer) they get, and regretting it later as they contemplate how much sweat equity they lost by not planning.

The good news is that Generational Equity and its team of exit planning professionals are here to help. We recognize that exit planning is important and starting the process is the most difficult first step anyone can take. So we are here to help you reach that point and begin the journey. One of the most important parts of our process is simultaneously helping the business (and the owner) become "buyer ready".

If you would like to learn more about where to begin your journey, you should make plans to attend a Generational Equity exit planning conference. Our award-winning meetings are designed by business owners, for business owners. You see most of our conference leaders were once in your shoes: Running a highly successful business, but realizing that an exit strategy was needed.

You can find more about our conferences and what you will learn here:

As the author Lewis Carroll once said, “If you don’t know where you are going, any road will get you there.”

Don’t make that mistake with the most valuable asset you own: Your future!

Carl Doerksen is the Director of Corporate Development at Generational Equity.

© 2019 Generational Equity, LLC All Rights Reserved

Make an informed decision

The best decisions in life are informed decisions. We release educational business insights like this every week. Subscribe to make sure you don’t miss the latest news, views and analysis.

Success

Success, you have been added to our list.

I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.
Michael J Polarek, President, Paragon Packaging
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.
Karen S. Williams, CFO, BW Manufacturing
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.
Pete L.
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!
Andy Graham, Vice President, Modern Heating & Plumbing
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”
Karen S. Williams, CFO, BW Manufacturing
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.
Larry Moore, Owner, A Company Portable Restrooms
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.
Michael J Polarek, President, Paragon Packaging