Unexpected Influence of Your Transition Mindset
A critical truth: 100% of business owners will eventually leave their company. Yet, only a small percentage actively plan for this transition. The reasons behind a business owner’s exit can largely be categorized as either running away or running toward something new. Understanding these motivations is key to ensuring a smooth and successful transition.
What Is a Transition Mindset?
Your transition mindset significantly influences the timing, strategy, and outcome of your exit. If you feel pushed out of your business—due to burnout, boredom, financial struggles, or personal circumstances—you might make rushed decisions.
These “push factors” can also lead to a lower business valuation and fewer desirable options when it comes time to exit.
On the other hand, if you are pulled toward your next chapter—such as a new venture, retirement, or a leadership change—you tend to have a more strategic approach. With a clear vision of what comes next, you are more likely to take proactive steps to ensure your business is well-positioned for transition.
The Consequences of Neglecting Exit and Succession Planning
Without a plan, entrepreneurs risk falling into the “not now” mentality. You might delay planning because you are too busy running day-to-day operations. However, time is not always on your side. Unexpected life events, market shifts, or industry downturns can force an exit sooner than expected.
Business owners who wait too long may find themselves in one of the following situations:
- Your company is not worth what you need to exit comfortably.
- Operational flaws or financial struggles make the business unattractive to buyers.
- The company’s success is too dependent on you, making it difficult to transfer ownership.
Strategies for a Thoughtful Transition
Be prepared for an eventual transition—whether it’s in 2 years or 10—you’ll want to be in a position of strength.
Some strategies for maintaining business value and flexibility include:
- Stepping back from daily operations and empowering a leadership team.
- Bringing in an investor or selling a portion of the business.
- Preparing the company for a third-party sale or management buyout.
- Passing the business to family or transitioning to an advisory role.
By planning ahead, you can not only increase the likelihood of a successful transition but also enhance the overall value and sustainability of your company.
“The best exit strategy is one that enables an entrepreneur to move forward with confidence—whether they are running toward their next opportunity or ensuring their legacy continues without them.” – Laurie Barkman, The Business Transition Handbook
Download your copy of The Business Transition Handbook (Btsherpa.com/book) for actionable ideas you can use for a successful business transition and exit.
