And that strategy needs to consider the most important element: the owner themselves.
Kerry Boulton of The Exit Strategy Group told My Business that it is crucial for business owners to not only prepare their business for life without them, but to conversely prepare themselves for life without the business.
“That is one of the keys which is so important, and that’s about personal readiness,” she said.
“When I’m working with people, I get them to think about, ‘If you’re not doing this every day, well, what are you going to do?’
“You might have this fantasy that says, ‘Oh great, I’m going to be able to play golf three times a week’, or whatever your passion might be... that’s great, but up to a point.”
Ms Boulton agreed that life is very different once the exit from a business is complete.
Indeed, this has given rise to the term “Baby Boomerangers”, in recognition of the Baby Boomers who retire only to get bored or restless and then seek to rejoin the workforce or world of business. Or alternatively, they find themselves financially unable to support themselves long-term, and necessity pushes them back to working life.
As such, Ms Boulton said that any exit strategy must look at the owners themselves, their financial readiness to leave the business and what they plan to do with their time once they have left.
The first step, she suggested, can be a well-earned break.
“I think it’s really important to give yourself permission to decompress once you’ve been in that situation.
“But then you have to think about what’s next? There’s got to be something else after that, because you lose your sense of purpose [exiting a business], and a life without purpose is no life, quite frankly.
“And, very sadly, there’s been some statistics that support that, particularly among men rather than women, is that five years down the track, they’re gone, because they’ve basically lost their purpose and they haven’t thought about what their new identity is going to be and what are the things that they are going to do down the track.”
For people who are planning to retire, rather than become serial entrepreneurs, Ms Boulton said those activities can be volunteer and community work, spending more time with family — particularly, if any, grandchildren — or maintaining some part-time work to continue generating some form of income.
“You do have to stop and think about it; you have to give that real thought to ‘what the heck am I going to do next?’” she said.
“Everyone’s going to exit their business one day, because we’re human. So, we can either go out with our boots on, or we can do something about it and think about it.”
Ms Boulton previously told My Business that there will be a glut of businesses going up for sale in the coming years, as Baby Boomers look to retire.
That was in response to research by American Express suggesting that one in four owners has dreams of leaving their business within the next three years.