The Critical Thing Entrepreneurs Rarely Consider…Until It’s too Late
You may have heard the phrase, “Starting something is not as important as finishing it.”
This axiom holds true for virtually every element of life – whether it’s physical, emotional, spiritual, personal or professional.
However, “finishing” is one of the last things that entrepreneurs and business founders consider when starting a business and running it. They typically don’t give much thought to succession planning until they’re ready to retire.
Entrepreneurs – great at business planning, lousy at succession planning
In fact, a study conducted by Wilmington Trust found that nearly 60 percent of privately held businesses have not even considered succession planning. Additionally, a statistic from Wisconsin-based estate planning firm, the Walny Legal Group, found that 60-70 percent of small business owners wantto pass their operations on to their progeny, but less than 15 percent ever do.
The Wilmington study also found that owners who have considered an exit strategy for themselves want to ensure the following three priorities are addressed during any transition:
- Making sure the company remains viable in the long run.
- Ensuring that employees continue to have jobs and a future with the organization.
- Continuing to seamlessly meet customers’ needs without any disruption of delivering products or services.
Given these needs and the lack of succession planning for more than 8-out-of-10 owners, what options does a founder have for something they’ve spent all their life building?
Originally published on Entrepreneur.com February 17, 2021