• Jonathan Goldhill

Did You Know 75% of Owners Regret Exiting Their Business?


That’s right! ONLY 5% were happy with their net proceeds from selling, and 75% regret their exit one year after leaving![1] Shocking!

If you were like most business owners and you had just sold your most significant, most valuable asset for a tidy sum of money, wouldn’t you be happy? I guess not.

Let’s examine why you might feel regret or worse, unhappy.

But first, let’s be clear about a few other statistics.

Business Failures: From Early Years to Closing Time

First, most businesses fail to sell because they fail to stay in business. 70% of all companies fail to reach their 10th birthday.[2] Of the remaining 30%, most will shut down when it comes time to leave.

Of the few owners who do build something worth selling, 1 in 4 will go through a lengthy sale process only to find the deal fall apart before the closing. Why? 51% of the time they fail to close due to seller misrepresentation or an unreasonable seller or buyer demand.[3]

According to John Warrillow, author of Built to Sell and founder of the Value Builder System, “When you look at the broad themes in the data, you’ll see that transactions fail for one of two reasons:

  1. The owners’ expectations are unrealistic

  2. The business is not ready to go to market

What Are the Business Success Requirements? Do You Know?

Building and selling a business is not easy. A lot goes into building a valuable, sellable business. While it’s never too late, you need to know how. And, that’s something we help owners fix.

As an adviser in scaling up and exiting, I have been working with growth companies for three decades, and I can tell you with certainty what it takes to grow any business fast. I’ve written articles and e-books on the subject and have coached hundreds of business owners - only a small fraction of which have exited their companies but have done so for some large sums of money.

I also know what’s required to grow a business beyond the dependency of the owner, any single employee or customer group. I have a system that can teach you and coach you through the process of building a more valuable business. HINT: It’s not just about the size or profitability of your company that drives value. If it were, then that wouldn’t explain why MOST business sells for 2.5x SDE (Sellers Discretionary Earnings) or 3.5x EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) while a nanny-focused payroll company which had a monopoly in its niche with high customer satisfaction scores and predictable earnings SOLD for 6x REVENUES!

So, What’s Your Business Worth?

You are invited to get an estimate of value included with your Value Builder Score™ on the eight drivers of value. It takes only 13 minutes. Then, let’s have a debriefing conversation to decide whether the steps involved are worth pursuing.

I’m committed to ensuring you look back on your exit without regret, which is why I offer a unique tool:

Business Readiness to Exit: The Value Builder Score™ helps identify the drivers of value in your company and reveal what needs to be focused on to increase the value and sellability of your business. Go here to get your score

What’s Driving You to Exit?

Imagine you are thinking about exiting your business. What’s driving you to exit?

  • Do you feel like you are wanting to do something else?

  • Are you bored or burn out?

  • Is it too stressful or taking too much time to manage?

  • Is it time to retire or diversify your wealth?

  • Has the market peaked for your business?

Four (4) Drivers to a Successful Exit

Our research suggests 4 drivers lead to a satisfying exit.

First, your future vision. Where are you going?

Unless you have some travel dreams of sailing off into the sunset on your boat – as my older brother did – and settle down in the Caribbean. (Look him up at Carriacou Cottages). Or, perhaps you have plans to start another company -- like my client Chris Sugai when I guided him to get ready and sell Solar Art in 2009 to focus his attention on Niner Bikes which he founded in 2005. Without a future vision pulling you toward something else, if you are being pushed to sell then your regret may be understandable.

Second, your exit options. The more options you have, the better. Having the best alternative to a negotiated agreement if your negotiations are unsuccessful gives you leverage. There are at least seven options available to you when you are selling, so the more options, the greater your advantage.

Third, your attachment to your business. Does your company have your name in it? Did you start it? Have you owned it for a long time? How attached to your business are you? The more attached, the harder it is to let go.

Fourth, one of the most common regrets among owners who exit their business is the treatment of their employee’s post-sale. Believe it or not, most business owners care a lot about their employees. Case in point: I’ll never forget the events after the 1994 Northridge Earthquake. A client of mine at the time with 25 employees was so upset when his roof collapsed on his little aerospace machine shop that he came to me practically in tears. If it weren’t for his employees, he was ready to move back to France and call it quits. But, he stayed. And, we haven’t had an earthquake since. And, today his company employs about 500 people. And, he’s very proud of them and their contributions to his success.

Interested in knowing what your business is worth and learning more the 8 drivers of value in any business? Got 13 minutes? 13 minutes is all it takes to identify how to double your value, double your options and control your future. Get your Value Builder Score™ here.

Footnotes:

[1] According to The State of Owner Readiness Study 2013 conducted annually by the Exit Planning Institute

[2] Bureau of Labor Statistics’ Business of Employment: https://www.fundera.com/blog/what-percentage-of-small-businesses-fail

[3] Private Capital Markets Report 2017: Dr. Craig Everett, Pepperdine Graziadio School of Business Management.PRE

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