I’m sure you can think of specific moments where luck was on your side, where serendipity has helped move your business in the right direction, but I’m sure you wouldn’t contribute all of your success to it. So, it makes sense that you wouldn’t leave the future of your business up to luck either, right? Wrong. The unfortunate reality is that an estimated 63% of business owners lack a written strategic plan for exiting their business, meaning a majority of business owners are leaving their business succession in luck’s hands.^[1]

I’ve experienced firsthand the pain and loss that comes when a business is unprepared for the exit or loss of their owner. In the end, family relationships suffered, assets and jobs were lost, and Uncle Sam walked away the only winner. This story plays out over and over again since at any given time, 40% of U.S. businesses are facing the transfer of ownership issue. While over 50% of owners would like to exit or sell their business, only 1% successfully do so each year.^[2]

Business owners often have very surprising attitudes regarding their succession planning. They tend to be overconfident in their current “plan,” if it can even be called that. On nearly every occasion, when I take a closer look, it becomes clear that almost nothing has been taken care of, often leaving up to hundreds of millions of dollars at risk. These business owners were sure of their ability to run their business successfully, but they lacked the foresight to establish a fully fleshed-out succession plan.

According to the Small Business Administration, the primary cause for failure is a lack of planning, which can actually be a good thing. If the only thing hindering your success is a lack of planning, then the solution is simple: plan! When succession planning is done right, you gain the ability to control priorities, control the tax consequences and control your response to the unexpected. These dismal odds can be beat, and your business can be successfully sold or transferred and thrive into the next generation, with you and your successors reaching your designed destinations.

^[1] The Exit Planning Process, A Financial Services Group, 2010. Down Market Presents Exit Strategy Opportunities For Business Owners, National Underwriter, 02 Apr 2011

^[2] Entrepreneur, Sell Your Company With Savvy, 4/10/10

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