
Fred D. Zemel
Partner
201-896-7065 fzemel@sh-law.comFirm Insights
Author: Fred D. Zemel
Date: May 20, 2021
Partner
201-896-7065 fzemel@sh-law.comThe COVID-19 pandemic has taken a toll on business owners, causing many burned out entrepreneurs to ponder an early retirement. If you are seriously thinking about retiring or selling your business in the near term, it is imperative to have an exit strategy in place.
Many large business owners have escalated their retirement plans in the wake of the pandemic, according to the latest Business Owners’ Outlook survey by Wilmington Trust and M&T Bank. It found that many business owners are experiencing burnout and exhaustion, resulting in a high percentage moving to retire earlier or looking to sell their companies.
The survey data indicates that the number of owners who say they plan to retire sooner than expected has doubled since August 2020. Among owners of larger businesses, the survey revealed a 110% increase since last August; meanwhile, the number of owners of smaller businesses who plan to retire sooner has jumped 100%. In that same time period, the percentage of owners of larger businesses who say the pandemic has caused them to sell their business sooner than expected has increased 31%.
Interestingly, the survey found that business owners are also less optimistic that their wealth will be well-managed in their absence. In March 2020, 50% of all entrepreneurs were very confident that their personal and business assets would be well managed in their absence. That figure dropped to 34% in the latest survey.
While it may be possible to accelerate the timeframe for selling your business, it is still imperative to have a plan in place. Without careful planning, you could risk losing everything you have worked so hard to build.
When developing an exit strategy, there are numerous issues to consider. Below are a few that should be at the top of your list:
If you are not yet ready to walk away from your business, you should still have an exit strategy in place and a fairly good idea of how much your company is worth. Having a business valuation and exit plan in place helps ensure that you will be prepared to act when the time is right.
If you have any questions or if you would like to discuss the matter further, please contact me, Fred Zemel, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
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