Excuse #1: It makes no sense to start planning when my business isn’t worth enough to meet my financial needs. When it is, that’s when I’ll think about leaving.

This is a common, and not unreasonable, assumption: Why spend time, effort and money to plan to leave your business when, today, you can’t? Why not wait until it is at least theoretically possible to leave to begin the exiting process? [Unexpected things can happen, e.g., career-ending disability, divorce, death, etc. You should plan on at least having a value placed on your business at any time in your career. In addition, you should constantly strive, over the lifetime of your career, to continue to add value drivers to your business that will result in it being worth more. In the meantime, every business has value starting with the inception of the business due to tangible assets needed to operate the business, e.g., equipment, supplies, furniture, etc. that has value and can be sold if an emergency occurs – i.e., there is always some value in your business].

At age 45, Jerome Rowling was dreaming of the day he could leave his company. The past five years that Jerry had spent trimming fat, watching every dime and developing new marketing strategies on a shoestring had taken their toll. Like the trooper he was, Jerry kept his nose to the grindstone fully confident that if he worked hard enough, the exit he dreamed of would take care of itself.

Fast forward five more years and we find Jerry pretty much where we left him—dreaming more frequently, but doing nothing, about the day he will walk out the door. What had changed was that Jerry had reached his 50th birthday—a benchmark he had set years earlier—for the day he’d leave the business behind.

During the five years Jerry spent working in (rather than on) his business, he missed the opportunity to [all of these points should be considered and put into play from day 1]:

• Clearly establish his personal exit goals and objectives.
• Create an exit plan (based on his goals) that would identify the most productive actions he could take to create and protect value, and to do so in the most tax-efficient way possible.
• Drive up business value to the point where he could sell, pay taxes and exit with the amount of cash necessary to achieve financial security.

What owners know to be true, but often fail to act upon, is that growing value usually does not occur unless owners focus their efforts on deliberate actions that move the company measurably toward their goals. [These are the value drivers mentioned above. A few examples include improving your customer base, keeping your equipment current and in good working order, building a strong employee base, keeping accounts receivables to a minimum, developing a strong management team, having a powerful marketing program, etc.] In failing to act on what they know, owners don’t create or implement exit plans and so are never are able to exit on their terms.