Selling a business can be a significant decision for any business owner. It's not just about transferring ownership; it also involves letting go of something that may have been a big part of their life. Surprisingly, research has shown that a year after their exit, a staggering 75% of business owners regret their decision, with only 5% being content with the proceeds from their sale. So, what makes the difference between a happy and lucrative exit and one filled with remorse?
One crucial factor is what we call "future vision."
This article we delve into the concept of future vision as the first driver of the PREScore™, which measures an owner's readiness to exit their business.
Understanding the PREScore™
Before we explore future vision in detail, let's briefly touch on the PREScore™. This proprietary tool by Value Builder System™ is designed to help business owners evaluate their readiness to exit their business successfully. PREScore™ stands for "Personal Readiness to Exit," it relies on four primary drivers: future vision, structuring flexibility, personal detachment, and team involvement. These factors play a pivotal role in determining whether an exit is happy and lucrative or filled with regret.
Future Vision - The First Driver
The future vision is about having a clear sense of purpose and direction beyond the business. It's the idea of being "pulled" towards something exciting and fulfilling rather than being "pushed" out of the company due to negative factors. Let's delve deeper into the push and pull factors that influence an owner's decision to exit.
Push Factors
Push factors are those circumstances or reasons that compel business owners to exit their businesses. They often include:
Need to Diversify: Seeking to diversify one's investments or assets.
Market Peaking: Recognizing that the market for the business has reached its peak.
Personal Health or Family Health Concerns: Dealing with health issues affecting oneself or a family member.
Stress: Overwhelming stress or burnout from running the business.
Boredom: Feeling unengaged or uninspired by the business.
Desire to Retire: Wanting to enjoy retirement and explore new horizons.
It's important to note that one in three business owners has more push than pull factors, and these individuals are more likely to regret their post-sale exit.
Pull Factors
On the other hand, pull factors are the positive motivations and aspirations that drive business owners towards a happy exit. These may include:
Starting a Foundation or Philanthropic Venture: Pursuing a charitable cause or giving back to the community.
Starting a New Business: Venturing into a new entrepreneurial endeavour.
Improving Health: Focusing on personal well-being and physical health.
Travelling: Exploring the world and experiencing new adventures.
The Key to a Happy Exit
The happiest business sellers have something pulling them out of their business rather than pushing them. Their future vision goes beyond just exiting the company; it involves pursuing a passion, making a positive impact, or seeking personal growth.
Are you ready to explore your readiness to exit your business?
As a Value Builder System consultant, we primarily aim to help business owners achieve the best value for themselves and their businesses when they decide to exit. The PREScore™, with its focus on the first driver, future vision, provides valuable insights into an owner's readiness to exit.
Get your PREScore™
PREScore™ (or Personal Readiness to Exit Score) is an 8-minute, online questionnaire that evaluates a business owner’s readiness to exit their company on a personal level. Using an exclusive algorithm, developed by analyzing more than 40,000 business owners and conducting more than 200 in-depth interviews with owners who have recently sold, PREScore™ calculates an owner’s readiness by identifying their status on each of the 4 drivers of a satisfying exit. The 12 questions that make up PREScore™ are often overlooked by business owners, leaving them unprepared and in a state of crisis after the decision to exit is made. PREScore™ helps identify the at-risk areas and provides personalized recommendations for improvement, helping owners create a personal plan that ensures a happy and lucrative exit.