Why Exit Strategy?

Consider this: seventeen per cent of small business owners are planning to leave their business in the next two years and 40 per cent are aiming to leave in five years. Whether you live in Australia, USA, Canada, USA, NZ, the UK or South Africa the research is the same. There are a massive amount of Business Owners that will be looking to retire over the coming years.

Thirty per cent of small business owners in Australia are now over 50 years of age and this rate is increasing each year. In Canada it is estimated that within the next 15 years, more than half of the country’s current small business owners are expected to retire. In the US in 2001, 77 million Americans were 50 and older (comprising 28% of the population). By 2020 that segment will be 36% of the population.There is no doubt that, as the baby boomers near retirement and the average age of small business owners increases, the age-old laws of supply and demand will come into play. In such a crowded marketplace business owners will need to present their business in an appealing, professional manner to stand out from the competition and achieve the maximum return.

Sixty six per cent of owners, in this country, plan to use their business as their primary source of retirement income; forty three per cent aim to realise a lump sum benefit from the business; and 31 per cent expect an income stream.

For these people selling the business in order to retire, it is of paramount importance that the sale price will allow them to retire comfortably and not compromise their quality of life.

Research shows 70 per cent of businesses think succession and exit strategy planning is important but only 12 per cent have a documented plan. Unsurprisingly, the main motivating factor for the creation of a plan is age.

A major impediment to succession planning is that most entrepreneurs don’t understand the drivers that underpin the creation of an exit strategy. Selling a business is a marketing exercise that requires planning, preparation and a compelling pitch. An exit strategy needs to be achievable and have a realistic timeframe and measurable milestones.

The MAUS Accredited Partner Program unveils the key issues that need to be addressed in an exit plan, encompassing all the unique features of your client’s business, life situation and price expectations

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209/117 Old Pittwater Rd, Brookvale NSW 2100, Australia

Phone number:
+61 2 9907 1669


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