Owner burnout is bad for business

Many business owners have operated their companies for too long and have lost their interest or drive.  As a result, the business can flounder and stop growing.  Not only do revenues and profits suffer, but the value of the company goes downhill. And it only gets worse in a down economy.  When a business owner hits burnout, he or she must learn how to deal with it, or take steps to sell the company

A popular story I like to share with clients and prospective clients relates to the need for business owners to plan their eventual exit from their business.  It goes like this….

Claude and Mary are a lovely local couple married for nearly 50 years, 3 grown kids, and 5 grandkids.  Claude started his small manufacturing business in 1971 in the garage of his home. By 1980, he added a couple of employees, and started to rent some industrial space in the county. He built a strong loyal customer base that carried him through 35+ of business, not-to-mention put his kids through University, and lived comfortably along the way.  By 2004, both were 65 years old, their business was rolling along just fine, sales were approaching $1.5 million and at the time their business would have a value of $750,000… a perfect nest egg for retirement.

But they never did sell and their kids had their own careers and they were not interested in taking over for Mom and Dad… just a couple of years later, following a stroke and mild heart attack, Claude and Mary are still working now into their 70’s, albeit at a slower pace.

Last year when I evaluated their business, it’s value was a mere $40K

This is the classic… Sell out before you burn out!

There are many tools available to help individuals get into business, but few that help them get out.  Exit Planning is not mysterious, time-consuming, nor just a clever way to sell you another product.

Exit Planning is ALWAYS about 3 GOALS….

• Leaving on the date you choose.
• Having a choice in your successor.
• #1… Receiving the amount of MONEY you want.

Just as there is an almost infinite variety of businesses and business owners, so too are there many different Exit Strategies.   Yet all plans contain several common elements.  It usually takes 3-5 years to appropriately plan and execute an exit plan, if you haven’t started planning the exit from your business, it’s never too late to start.

Do you have small business questions you would like answered about this article or others?  Please visit www.VRWindsor.com or call 519-903-7807. 

William Sivell is a sales representative of VR Windsor Inc., Business Brokerage; his blog appears every Tuesday.