Every business owner knows they will eventually exit their current business. However, they usually only have a vague idea of what that exit will look like. Some owners want to extract value from the business; so, they can retire or simply move onto something new and different. Other owners want to leave a legacy and have a family member or key employee succeed them.
Most have the sentiment that they’ll sell, or turnover, their business when the time is right. Unfortunately, successful transitions aren’t guaranteed. Over 70% of businesses fail to sell. Only 30% closely held and family businesses survive the second generation, with only 12% lasting through the third generation. The number one reason a business fails to successfully transition is because the owner failed to plan their exit.