Why only a few business exits are successful?

May 26, 2022 | News Letters | 0 comments

 

 

“Have you ever been driving down the highway at 75 MPH and you pass someone who is backing up on the shoulder because he missed his exit?  That person is going to cause an accident, you think to yourself.  Unfortunately, that’s what most business exits look like!”  

Tom Bronson

 

 

Why only a few business exits are successful?

 

Over 80% of businesses that put themselves up for sale never close a transaction.  That means that less than 20% of those businesses have a successful exit.  This presents a terrible situation for the business owner that spent much of his or her career building what they believed to be a successful business.Family business transitions do not fair better.  Only 30 percent of first-generation transitions are successful, and that number goes down with subsequent intergenerational transitions.

Of the less than 20% that transition successfully, is there something those businesses have in common?   A few of them are disruptive businesses that attract suitors willing to pay high valuations.  However, the majority of those that transition successfully do so because they were prepared.

The prepared business owner has defined an exit strategy that is designed to build the business value and makes the business attractive to potential buyers.  These owners have a strong internal team and a savvy advisor to help them of achieving their goal to exit at the highest business value possible.

The process of building business value and transitioning the business takes time and it is not intuitive.  It is a process that is very different from running a day-to-day business.  That is why less than 20% of businesses have an effective exit strategy, and they are the ones who exit successfully.

Don’t wait until you have passed the exit sign.  Start preparing your business today so that you can exit when you want and on your terms.

If you would like help to develop your exit strategy, Revenue Igniter Group is available to help.  Contact us today with your business challenge.

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