Give your friend a big gift. Let them know the spouse of a business owner holds the key to their family’s successful (or shrinking) financial future.
Whether you are the friend of or the wife or husband of a someone who has invested their time, energy, love and passion into a business and built it into a success, it’s time for the wife or the husband of business owners to put their foot down and stop the owner from waitingitis.
Waitingitis is epidemic amongst people who own businesses with employees and have revenues from $5 million to $100 million.
Waitingitis actually creeps up on business owners as they age and get comfortable. They suffer from a belief that their successful company can be sold whenever they have finally had enough… because it’s been successful for them.
This contagious and ruinous belief means the owners never plan or prepare the business for that exit date.
Think about a business like you do a stock in your portfolio. It’s like holding shares in a high flying hot company on Wall Street. It’s exciting watching as the stock climbs the charts. And heartbreaking when it reverses course and you didn’t sell it at the top of the market.
And this doesn’t just happen with no-name companies. We all watched Apple soar to $700 a share in September of 2012. If you owned shares in Apple then, that would have been the time to sell to capture your profits.
Within a few short weeks, Apple was trading at less than $500. I know. I still own Apple shares. Sigh.
It’s the human condition: We all wait in hopes that there will be a better moment in time to capture our profits, solidify our gains and get our reward for all the hard work. And then the moment passes. The opportunity is gone and the value has seeped away.
What’s the problem with waitingitis?
Owners who don’t make their companies saleable are sitting on a melting asset. Melting assets close one day. It’s like flushing money down the drain. That’s the family’s financial future they are throwing away when their spouse is stuck in waitingitis.
You think your friend would be ok with a declining nest egg should the business not be sold one day?
This can be a hard concept to grasp for business owners and their fellow partners. The company they have raised supports many employees and their families. They have developed their careers by investing in this business too. Customers depend on the business. Suppliers and the local economy rely on the company continuing to serve up value long after the owners have moved on.
Waitingitis actually creates risk for all those stakeholders… and family fortunes.
A business should be made saleable 2-4 years before the desired exit date… Because a saleable business is a more profitable business for the current owner.
Because buyers look for acquisitions when it suits their timeline, not the owners. If the owner is not prepared, they continue searching to find the competitor who has invested in making the business saleable. Buyers want to buy saleable companies. They can’t acquire a business that is un-saleable: too many risks, not enough rewards.
Because even though your friend’s business is successful (they have a great lifestyle, right?) it does not make it attractive to the next buyer unless the risks they care about are removed and the ingredients they search for are added.
Because life throws curve balls like health crises, key employees leaving, and industries shifting away from the products, services or solutions that have built their reputation.
Every business has an ideal ‘best before date’ for when it should be sold.
Because a saleable business is like holding a winning lottery ticket and an un-saleable business is the losing ticket. A ticket that leaves people with regret and disappointment. And that’s the family’s financial future on the line.
When people ask the owner(s) about their future plans for the business you hear:
- “I’ll exit when I’m good and ready!”
- “Hey, the business is totally successful now, it can be sold whenever I want to sell. Don’t worry about it!”
- “I’m waiting till my son or daughter is ready to take over.”
- “I don’t want to retire anytime soon.” yet they complain about what goes on at work.
- “What would I be doing if I sold? There’s no point, it’s not like I ready to be sent out to pasture!”
- “We don’t have anyone on the team that can do what I do. The place would fall apart if I didn’t come in each day.”
- “I’ve done my succession plan, that’s all I need to think about to get a buyer. I’m ready if a buyer approaches me.”
If you or your friend is married to a business owner who has waitingitis send them to this link. You want your friend to recognize he or she has a choice: to become saleable or to close one day (a business that isn’t transferrable or saleable will eventually wind down without new management to run it for the owner).
It’s time owners know the facts of business life… 90% of owners fail to sell. The 10% that are successful did the work to become saleable 2-4 years before their desired exit date.
Who better to break the news than a person they know, and trust… a good friend like you.