Recently, the Federal Minister for Small Business, Bruce Billson, launched the report, Succession Reset: Family Business Succession in the 21st Century. The report is the culmination of 4 years of research of 2650 people across 56 countries conducted by Pitcher Partners and Swinburne University.
Baby Boomer business owners were the subject of the research, but it is a lesson for every business owner, whether you are a baby boomer, generation X, Y, Z or Millenniums In fact, my invitation is for the younger generations to not make the mistakes my generation have
The research identified that in 2020, the Baby Boomer generation (those born between 1946 and 1964) will be aged between 56 and 74 years of age, with the weighting heavily towards the older end of the scale.
It also identified that most likely a significant number of baby boomers will have or will be in the process of transferring ownership of their business, the estimated value of which in Australia is around $3.5 trillion. 81.1% of these Australian baby boomer businesses DO NOT have a succession plan. In other words, they do not have a plan for what happens to their business beyond themselves.
In my experience of implementing succession plans for a business, it takes somewhere between 3 to 5 years to develop and implement, depending upon what is already in place in the business.
You simply cannot wake up tomorrow and say, “I’m going to get a General Manager in tomorrow so I can step out”. Now, I know you’re sitting there saying you’d never say that, but it happens every single day. Just in the last 12 months, the following unforeseeable events have happened to business owners just within my own networks…
And that doesn’t even begin to take in to account the unforeseeable events which occurred for spouses and children.
Based on this research, time is running out for most baby boomer business owners to set their business and their successors up for success. They need to get started today!!!
Here are the excuses business owners give me when asked whether they have an exit strategy in place for their business.
In my opinion a business that is really sale ready is one that is NOT dependent upon the owner.
That means it has all the systems and processes, approved by you the owner, so that business is done the way you want it to be done. It also means you have the right people doing the right job at the right time.
You may still choose to work and that’s OK. Alternatively, you may choose not to work and that’s OK. It means though, if you are working, you are ONLY doing what you love and when you want to. It DOES NOT mean you “have to” retire (if you don’t want to).
A business which does not rely on the owner to keep it going is very attractive to investors and potential buyers. If your business still requires you for it to run, then, if you do sell it, the sale will usually be conditional on a term of you being employed by the new owner.
And if you think you’ll just hand the business over to your kids, think again. Many baby boomer business owner’s children don’t want their parents’ business! They’ve seen how hard their parents have worked and they don’t want that burden for themselves.
At Kaibizzen, our philosophy is your business is the tool (or cashflow) to give you the lifestyle you want. Employees trade their time for money (and the ability to earn more is capped). As a business owner, you have employed others to do the work, (so you’ve traded your money for time). The reward for you is you don’t have to do the work to earn the money you want the business to give you.
That’s great, right?
Our process is:
My invitation to you TODAY, as we come to the close of another year and about to embark on another, is, no matter what “generation” you belong to, make 2021 the year that you “begin with the end in mind” (Stephen Covey).
What does your business look like beyond you?
When do you want that? (remember you’ve likely got 3-5 years of deliberate work BEFORE you’re going to get it).
And here’s some final thoughts:
Maybe in your case though your exit plan includes your family. If it does, that’s wonderful because your family knows how “to do it”. Many of the family businesses that we work with, it’s the daughters not the sons who are the drivers of the new generation forward. It’s imperative that the best person is the leader of the business going forward
Is 2021 the year put your business on the path operating without you having to be there? In our 17+ years of business coaching, Rob and I have worked with many businesses to achieve this. We’re here to work with you to achieve the same result – a business which gives you the lifestyle and freedom you went in to business for.
Reach out for a confidential conversation and make 2021 the year you achieve the business and lifestyle you’ve always wanted for you and your family.
What does it take to actually remove yourself from the day-to-day grind of business? Learn from our panel of Business Owners who've Been There, Done That.
