Sooner or later, willingly or unwillingly, deliberately or unconsciously, a small business owner decides how they’ll leave their business. Whether they’re carried feet first out the door at death; they sell; they transfer the business to the next generation; or they take some other path out the door: the day will come when each owner makes their final exit from their business.
Even where an owner has partners, other shareholders or equity owners in the business who have agreed on a plan allowing one owner to leave the business while the remaining owners carry on its operations; there may be a problem where the partners or equity owners are all of approximately the same age and are likely to exit the business at about the same time. Unless the existing plan for the departure of owners insures a transition from an older to a younger generation, the presence of partners or other equity owners may simply mean that the problem of how to leave the business is an issue for the owners as a group rather than for just an individual.
Anticipating their inevitable final exit should prompt any small business owner to realistically consider their options and plan for their departure well in advance. An owner should begin thinking early, often and realistically about how they can best realize the value of their business when they leave. An owner’s thoughts should adapt to the changing possibilities and opportunities for leaving their business as both owner and business age. An owner’s ultimate exit from their business is inevitable. Only how an owner leaves their business and whether that departure is deliberately made before they die or become incapacitated is within their control.
The point of this short note is simple. If you don’t have a plan for leaving your business, make one. If you have a plan, review it regularly to make certain it will work. If necessary, change your plan as conditions and opportunities change. When opportunities appear, consider them carefully in the context of both your present and your long term goals. Like most things, the more an owner thinks and plans on leaving their business, generally the better and more satisfying their exit will be.