Shockingly, if you’re thinking about selling your business, the chances of you being unable to sell it (or selling at a loss) are much higher than you think. In fact, if you’re unprepared, you could be sleepwalking into a living nightmare if you don’t build your business now for an eventual exit.
To help you see how important this is, I’ve got some “scary facts” below that will shed some light on how vital it is that you begin figuring this stuff out before it’s too late.
But first, let me begin by sharing a bit about my experience…
Scary Fact Number 1 - Sellability Shock!
Less than 30% of business owners under $30 million revenue sell.
Approximately 80% of businesses in the United States with revenue of $1 million or less, classifying them as Main Street businesses.
Only 20% of businesses with revenue of $1 million or less actually sell and 30% of mid-sized businesses with revenue between $1 million and $30 million.
For those that do sell 75% of owner’s profoundly regret selling their business just a year after completing the transaction.
That’s not meant to be an insult to your intelligence or business savvy in any way… but the numbers don’t lie. The fact is and the reason for this statistic is that most businesses who FEEL they are ready to sell are unprepared, to say the least.
Selling your business can be an exciting event that comes with an incredible payoff, but without being properly prepared and with the wrong people around you it can be a disaster that wipes out your wealth.
Scary Fact Number 2 - The Wealth Wipeout!
80-90% of the owner’s wealth is trapped in their company.
Picture this: as a business owner, you’ve poured your heart, soul, and countless hours into building your company. It’s your baby, your pride and joy. But here’s the catch—according to recent statistics, a staggering 80-90% of your wealth is trapped within the confines of your business.
Why is this statistic so horrific? Well, think about it. Your entire financial future, your retirement plans, your dreams of financial security—all tied up in one entity. If anything were to happen to that business, whether it’s a downturn in the market, unforeseen circumstances, or even just the natural lifecycle of a company, it could spell disaster for your personal finances.
Imagine waking up one day to find that the value of your company has plummeted, leaving you with a fraction of the wealth you once had. It’s a nightmare scenario for any business owner.
But it’s not just about the potential for financial loss. Having such a large portion of your wealth tied up in your business can also limit your options. Want to diversify your investments? Good luck when the majority of your assets are locked away in one place. Thinking about retirement? It’s a lot harder to step away from your business when your financial security is so closely tied to its success.
Scary Fact Number 3 - Forced Exit Fears!
50% of transitions are involuntary, forced exits
Imagine this scenario: you’ve built your business from the ground up, pouring in sweat, tears, and countless hours of hard work. You’ve navigated the ups and downs, weathered storms, and celebrated triumphs. Then, out of nowhere, you find yourself facing an involuntary, forced exit from your own company.
It’s a chilling statistic: 50% of business transitions fall into this category. Whether it’s due to unforeseen circumstances, conflicts with partners or stakeholders, health issues, or economic downturns, the reality is that half of all business owners are forced to relinquish control of their businesses against their will.
Why is this statistic so terrifying for business owners? Well, for starters, it shatters the illusion of control. No matter how successful or well-prepared you may be, the unpredictable nature of life and business means that your future at the helm of your company is never guaranteed.
But it’s not just about losing control—it’s also about the emotional toll. For many business owners, their company is not just a source of income, but a deeply personal endeavor tied to their identity and sense of purpose. Being forced to walk away from something you’ve poured your heart and soul into can be devastating.
And then there are the practical implications. Forced exits often come with financial repercussions, whether it’s selling the business at a loss, facing legal battles, or grappling with the fallout of a damaged reputation.
So, what can business owners do in the face of this grim statistic? It’s about being proactive. Building contingency plans, establishing clear communication channels with partners and stakeholders, and diversifying revenue streams can all help mitigate the risk of an involuntary exit.
With this in mind it feels like madness that 30% said they have no plans to transition at all and that 60% of owner’s do not understand their exit options.
Are you one of the 40% of owners that want to sell within the next 5 years?
If so I think there is an even bigger problem that most sellers never realize they have, because an exit doesn’t start when you think about selling your business…
You Are Always Exiting Your Business, Even If You’re Not Selling It… Exit Strategy is just good business strategy.
The truth is that every business owner is always working on an exit, in one way or another, whether it’s on your terms or not.
Being “Exit Ready” doesn’t mean you have to be actively selling your business, it’s about strategically and methodically positioning your business to be ready for an exit, if and when you choose…
Your business is generating income and feels successful, there are some recurring untruths that prevent you from seriously thinking about preparing for that next step strategically and methodically positioning your business to be ready for an exit, if and when you choose…
- Afraid of getting old- you don’t want to think about a time in the future when you are no longer doing what you have been doing for most of your life
- You are trapped- you have a great income that schools your kids, gets you a nice car and great holidays, a feeling of security
- You are uncertain what to do next- how are you going to spend your time when you no longer have the business
- You don’t want anyone to know you are planning to exit- if it is common knowledge you are exiting productivity will drop and your status will be affected
- Exit planning doesn’t feel like the main priority- you are still in the business delivering to customers and those orders need to be met!
- You are misinformed, you don’t have the knowledge to plan an exit- Exit planning is just an extension of good business strategy
Take the quickest path to successfully exit your business and collect the full value you’ve invested in over the years.
You might have no desire to exit your business now or in three years, but it just pays to start thinking about it now.
“Position your business to seize opportunities and safeguard against the unexpected, ensuring you can always reap its full potential value.”
In summary, if you’re considering selling your business and are not confident that you can maximize the value yourself – or if you’re interested in running a massively profitable business – this webinar is for you!
Don’t miss your chance to tap into my experience helping to sell dozens of businesses over the last decade so that you can turn that into maximum profits for yourself.
Click below to register for the webinar series starting March 7th.
Rob Williams
Exit Strategist and Coach
Big Life Financial