55% of all business exits are as a result of failure !
55 % of all business exits are due to death, disability, bankruptcy, liquidation or simply owners walking away and closing the doors.
To avoid this type of exit a business exit and succession plan is a vital part of business management. Business owners typical go into business with 3 key outcomes; increased freedom & flexibility, improved income and to build equity. Whilst the first two are generally possible the third outcome to build equity or wealth is not without a valid strategy.
There are many and varied exit strategies available to SME’s though with varied complexity, costs and risks:
Recent research, and our work with clients over the last 6 years, has shown a significant increase in the adoption of Employee Share Plans as a valid strategy with a substantial side benefit of attracting and retaining key employees within the business.
Approx 440,000 employees ( 5 % of the workforce ) now participate in these programs and the value of employee held shares or options exceeds $10billion. A recent study of the top 350 listed companies showed that 89.4 % had some type of plan in place compared to only 3 % of private companies.