As Australian businesses face staff shortages and rising inflation, new data from Australia’s largest business organisation, My Business, shows more than half of small business owners don’t have an exit strategy.
The first findings of the ‘Recipe for Success Survey’, of nearly 2,000 Australian business owners, found that of those that did have a strategy, 41% plan to sell their business to another organisation, 20% plan to leave it to a family member and 15% intend to eventually close down.
Richard Spencer, Chief Customer Experience Officer at My Business, who is releasing the survey data this week at the My Business roadshows, says it’s important to map out a business exit strategy – even if you’re not planning on leaving anytime soon.
“The survey tells us 59% of respondents don’t have an exit strategy and even more (75%) didn’t have one before starting their business,” says Mr Spencer.
“Without a clear plan for how you will steer the business, and eventually wind up your involvement, you may end up selling the business for less than it’s worth.”
“The whole process can also end up being a lot harder than it needs to be – often business owners are left scrambling to get things in order.”
Richard Spencer shares the top 3 things to consider when preparing an exit strategy for your business:
Plan for the future you want:
Don’t just create a business plan but plan what you want from your business as an owner. 35% of respondents were not entirely clear on what they wanted to achieve from owning their business.
Get your business valued:
Our data found that only 1 in 5 businesses have a formal valuation of what their business is worth. 40% are simply guessing what their business is worth!
3. Actually write an exit strategy: 60% of respondents did not have an exit strategy. Business owners tend to be more likely to benefit from owning a business if they plan their exit as early as possible. Plan your way out as carefully as you planned your way in.
The survey also found that small business owners have a greater appetite for risk than the general public and were also more inclined to be both goal-oriented and self-motivated.
The survey responses consisted of 1,850 small business owners and also 2,047 members of the general public and compared their attributes.
“The other major personality trait we noticed that was more prevalent in small business owners was a commitment to lifelong learning,” says Mr Spencer.
“We undertook the survey to gain more insight into what attributes makes a successful businessperson so we can empower other owners on their business journey and focussing on continued development and constantly learning, growing and adapting are key to success,”“Of the business owners surveyed the majority of them were female, aged between 34-44 years old and nearly half had been in business longer than 5 years.” he says.
Survey Source: ‘Recipe for Success Survey’ Conducted by My Business & Pure Profile – August 2022
