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Building Your Entrepreneurial Legacy: Preparing for Your Exit
By Monique A. Dearth — Enterprising Women Magazine
The On-Ramp/Off-Ramp trend is receiving quite a bit of press lately as women leave corporate jobs in droves to seek more balance and options. Many of these women cite reasons such as a desire to spend more time with their children, care for aging parents, or simply a need for more flexibility. It is many of these women who have ‘opted out’ who form the growing number of women business owners and entrepreneurs who start their own companies after leaving their corporate assignments.
But, what about women who are currently entrepreneurs and successful business owners who decide to ‘opt out’ from their own enterprises? How and when do these women decide when they have reached the point where they are ready to sell their business and do other things? How do successful women business owners leverage their desire to exit their own businesses?
Most women business owners know how important it is to have a solid business plan when starting a new endeavor. Experienced women entrepreneurs will tell you that it is just as important to have a plan for how to end your business, whether by selling it, closing it, or handing it off to someone else in the family to run.
The RSM McGladrey 2007 Survey of Women Business Owners surveyed 650 women business owners. Interestingly, when asked about the ‘primary long-term goal’ for their business, respondents in the smallest business revenue class wanted to primarily “generate enough income to provide for a comfortable life.” However, as revenues increased, so too did the number of respondents who not only wanted to generate additional income, but furthermore also wanted to “build a business and sell it to make enough money for retirement” and “build a business to pass on to future generations.”
Clearly many women
business owners are thinking beyond the idea of just ‘making money to
pay the bills today,’ and instead are thinking ahead to the day they
step out of running the business. Yet there exists a perception that
women are not as prepared as men to formally develop and implement an
aggressive exit strategy. The myth exists that women who own small
businesses typically don’t focus on developing an exit strategy. Two
recent studies provide perspectives on this point.
The study conducted in-depth interviews with 9 women executives who sold their businesses which each generated at least $4M in annual revenues. These 9 women offered terrific advice for those considering the possibility of a sale in the future:
In October 2006, The Center for Women’s Business Research completed a comprehensive study, “Exit Strategies of Women and Men Business Owners.” This report purported to ‘bust’ the myth that women business owners tend not to be prepared to exit their businesses. It stated that the vast majority of women business owners (83%) do have a long-term exit strategy, and like men, they rank price as the most important factor to consider when selling their business. The research suggests that women entrepreneurs prepare as well as men when deciding to exit their business. Several interesting facts emerged:
The net result? Conventional wisdom dictates that women are typically more attached to their businesses, and therefore less likely to have a clearly defined exit strategy. In fact, perhaps the opposite is true. Perhaps women business owners are demonstrating a growing maturity, a deeper understanding of this last phase of their business cycle, and are increasingly likely to have long-terms plans in place for exiting their respective companies.
Monique A. Dearth, J.D., is
the Founder and President of Incite Strategies. Incite Strategies
focuses on global Executive Assessment and Development for companies
like GE, The Home Depot, StatOil, and Ventana Medical Systems, and
through HR OptIn provides flexible HR project management solutions to
mid- and large-size companies. Monique can be reached at 678.513.7661.
More information on the reports referenced above can be found through the Center for Women’s Business Research.
Last Updated 4 Year(s) ago