Stats on the state of the boomer business owner world, from the 'State of Owner Readiness' survey 2016.
1. Boomers own 63% of private businesses.
2. 80-90% of their wealth is tied up in their business.
3. 76% plan to transition over the next 10 years. 48% in the next 5 years.
4. 12 months after selling 75% of owners 'profoundly regretted' the decision.
(Want to know how to avoid the whole regret part?)
Have I got your interest?
5. 70-80% of businesses put on the market don't sell.
6. Less than 30% of family-owned businesses survive into the second generation.
7. 67% of boomer owners are between 50 and 69 years old.
Stop for a minute and take it in. Now continue.
8. 75% have an annual revenue of under $5 million.
9. 85% of family owned businesses are first generation.
10. 24% say you're familiar with transition options. 44% aren't and 32% are not sure.
11. 88% have NOT established a formal transition team.
Sounding familiar?
12. 86% have no formal education related to transitioning your business.
13. 67% have no provisions in place if key personnel get ill or die.
14. 50% have no thoughts about your post transition life after the business.
Wow that was a mouthful. Take another minute and let it sink in.
I will guarantee you one thing. You don't know what you don't know. And that will absolutely lead to a whole lot of trouble. The challenge is who do you talk to?
Here is just one example of the misguided thinking many boomers are doing.
You think if you keep the company for a few years longer and take as much as you can out it will more than make up for what you think you could sell for today. Then, in a few years, you'll sell for whatever you can get or just close down.
Nice plan, unfortunately, putting off selling or even just getting the company ready for transition or 'dying with your boots on' are not really exit strategies, now are they?
What if, in the meantime, you get ill or worse? The mess you'll leave behind for family, partners, management, employees, customers and vendors will ensure they talk about you for a long time to come.
It's not all doom and gloom. There is a silver lining.
What if you could delay selling, keep taking money out, increase the value of the company and sell for more later. More than you think you could get now.
Have your cake and eat it too. Hmm, that is worth looking into.
As a successful business owner, you're smart enough to at least consider all the other options available to you. But where do you go to find out about them?
Excerpt from 'Moving Forward' Eric's book.
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