What Does Starting A Business Have In Common With Exiting A Business?Aug 19, 2022
By Darren Cherry
When you start a business, you leap and assume the risk with hopes of achieving a dream. This dream may have many facets, such as being your boss, attaining financial security, pursuing your passion, and spending more time with loved ones. To achieve your dreams, you knowingly sign up for one of the most challenging jobs in the nation.
According to the U.S. Bureau of Labor Statistics (BLS):
- approximately 20% of new businesses fail during the first two years of being open,
- 45% during the first five years, and
- 65% during the first ten years.
- Only 25% of new businesses make it to 15 years or more.
As an entrepreneur, you pour your heart and soul into a venture where the risk of failure increases yearly. For those that make it more than 15 years, you are in the elite club of survivors. To get to this point, you probably endured more of a journey than a straight line to success.
During this journey, you probably performed some of the following:
- formulated a strategy
- revised strategic direction
- endured a crisis
- assessed your current state versus aspirations
- sought some guidance from experts
- upgraded teams and advisors as you grew
For most, the goal of achieving financial security has grown and still looms heavy on the to-do list. Currently, the company provides a cash flow that adequately covers your lifestyle. Whether the business can provide a flow of funding during your retirement years is where uncertainty enters. For most, achieving future financial success means building an attractive business that is sold at a level to finance retirement adequately.
CHALLENGE: Less than 20% of the businesses listed on the market successfully sell.
Although the success rates are comparable, owners can significantly improve their exit success with more robust planning. A great place to start is to have a baseline assessment of your business completed. Feel free to reach out to me for more information.
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