Why Would an Owner Who Loves Their Company Ever Leave It?

Most business owners love the companies they’ve founded whether it’s because of the work they do, the changes they effect, the money they make, or something else. When owners carve out a comfort zone within their businesses, it can cause them to question why they would want to plan for their exit. They often make excuses like, “I don’t plan to retire for another 5-10 years” or worse “I don’t ever plan on leaving”.

For the 90%+ of business owners who intend to leave their businesses before they die, financial security is an absolute must¹. Many owners have the belief that they can cut back and spend less in retirement. This is almost never the case. While they run their businesses, they typically pull a salary and use perks like company transportation, insurance, technology and networks. They often travel as a company benefit. In short, post-business life is usually more costly than it was before the exit. All of these perks have to be provided without the safety net of steady income provided by the business.

An exit planning advisor can help. Even if the owner’s exit is 5-10 years in the future, they can help establish goals and provide estimates for what it will cost to work towards achieving those goals. The advisor can help determine the gap between the money they have and the money they need. They can also compare that gap to the company’s current value and then help develop value accelerators to try to close the gap.

Post-exit, many business owners will tell you they wish they had started planning sooner and committed more time to the planning process, working on the business instead of in the business. Many have regrets. Owners who exit by choice during their lifetimes should assure their financial security before they exit. Commit the time, you won’t regret it.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

¹ Exit Planning Solutions, https://www.exitplanning.com/blog/why-would-owners-who-love-their-companies-make-plans-leave, October 4, 2019.