Business owners have a singular focus on ensuring their companies continue to thrive, so allocating time to build a transition plan can be perceived as a distraction from important work. The truth is planning is important work.
Wilmington, Del. (PRWEB)
September 14, 2017
A new survey from Wilmington Trust and a team of academic advisors found that 58 percent of owners of privately-held businesses lack a transition plan despite financial risks of not planning. The research, titled “The Power of Planning,” surveyed more than 200 owners of privately-held companies about their plans and goals for transitioning their business.
According to the research, the top reason for business owners delaying transition planning was their passion for the day-to-day logistics involved in running their companies. Seventy-eight percent of business owners who did not have a transition plan said they enjoy managing their company too much to start thinking about a future transition. Further, 42 percent responded they were too busy to start planning, while 44 percent felt that a transition was too far in the future to establish a plan.
“Business owners love what they do, so it can be difficult for them to imagine a day when they need to give it up,” said Matt Panarese, president of Wilmington Trust’s Mid-Atlantic region and leader of the firm’s National Business Owner Practice Group. “The reality is that planning effectively and running a business are not mutually exclusive. Owners don’t need to walk away from the business they’ve spent their lives building to start thinking long-term. In fact, early planning can provide more flexibility and allow owners to continue to work in whatever capacity they choose—before and after a transition.
“What business owners need to realize is the sooner they start planning, the better their odds of achieving their goals—both financial and personal. While some owners may be closer to a transition point than others, it’s not too late to create a meaningful plan.”
Surprisingly, 47 percent of respondents age 65 or older still do not have a transition plan in place. Yet 67 percent of all respondents said getting older is the top reason for creating a plan, followed by providing security for their family (55%). Rounding out the top…