In the world of business ownership, “exit planning” is still misunderstood.
For mature business owners, the term “exit” can make them feel as though they are being rushed into retirement. For Gen X (1965-1980) and Millennial (1981 -2000) business owners, the idea of “exiting” may seem like a vague and distant event with very little impact on the day-to-day demands of owning a business.
In fact, exit planning involves much more than simply “exiting”. It is a holistic approach to maximizing the value of your business in the present, to achieve optimal value in the future when it’s time to transition or sell. Just as a baby boomer planning on retiring in the next 10-20 years needs an exit plan, so does a millennial business owner who’s just starting out.
This is especially apparent given the potential for an entrepreneurial boom in the coming years, “beginning with two of the biggest demographic forces shaping the U.S. [and Canadian] economy: the aging of boomers and the emergence of millennials into the workforce” (Kaufmann Foundation, Sixth Annual State of Entrepreneurship Address).
Millennials are expected to be the most educated and entrepreneurial generation to date; surpassing even baby boomers whose needs, desires, and ambitions have consistently stimulated the creation of numerous global industries and cultural shifts. This said, millennials also have the most student debt in history and fewer financial means than many baby boomers did when they were starting a business.
An exit plan can help to mitigate financial stress by refining the direction of your business and ensuring it runs smoothly. Amongst other things, a comprehensive financial analysis (i.e. bank fees, pay-roll, assets, inventory, processes, etc.):
- Increases stability
- Standardizes business processes
- Provides a valuation of your business and,
- Fosters team enlightenment and empowerment
As millennials increasingly join the workforce, they will continue to challenge companies to redefine what it means to work effectively, be productive, and attain success. They are likely to change careers more than previous generations and will strive to attain a work-life balance, even if it means foregoing promotions or pay increases. Some millennials may start, sell, and/or buy numerous business in their lifetimes and having an exit plan means your business is attractive, saleable, and leverageable when the next great opportunity comes knocking.
Connect with us to learn more about building your exit plan.