By: Jack Ellsworth
Your age can have a big impact on your attitude toward your business, and your feelings about one day getting out of it. In fact, we know of one business advisor who runs a successful boutique mergers and acquisitions business who flatly refuses to take assignments from business owners over the age of 70. Why? He has found that septuagenarians are so personally invested in their businesses that they can rarely bring themselves to sell or transfer the business – frequently calling off the deal halfway though, claiming that they just wouldn’t know what to do with themselves if they left the business.
John Warrillow, the author of Built to Sell: Creating a Business That Can Thrive Without You, noted several age-related patterns that emerged in the research for his book. While it is dangerous to generalize – especially on something as touchy as age – there is probably some truth for business owners to consider in these patterns noted by Warrillow.
Owners Aged 25 to 46
Twenty- and thirty-something business owners grew up in an age when job security did not exist. They watched as their parents were downsized or packaged off into early retirement, and that resulted in a somewhat jaded attitude towards the role of a business in society. Business owners in their twenties and thirties generally see their companies as a means to an end, and many expect to sell in the next 5 to 10 years. Similar to their employed classmates, who tend to move to a new job every 3 to 5 years, business owners in this age group often expect to start and sell multiple businesses in their lifetime.
Aged 47 to 65
These are the “baby boomers.” They came of age in a time when the social contract between a company and an employee was sacrosanct. An employee agreed to be loyal to the company and, in return, the company agreed to provide a decent living and a pension for a few golden years.
Many of the business owners in this generation think of their company as more than a profit center. There is a much more personal and emotional attachment to the business. They see their business as part of a community and, by extension, themselves as community leaders. To many boomers, the idea of selling their company feels like selling out their employees and their community. That is why so many business owners in their fifties and sixties are torn: they know they need to sell to fund their retirement, but they agonize over where that will leave their loyal employees.
Business owners in this age category grew up in a time when hobbies were impractical and discouraged. You went to work while your wife tended to the kids (today, more than half of businesses are started by women, but those were different times), you ate dinner, you watched the news and you went to bed.
With few hobbies and little other than work to define them, business owners in their late sixties, seventies and eighties feel lost without their business – that’s why so many refuse to sell or experience depression after they do.
Of course, these are broad generalizations and there will always be exceptions to general rules of thumb. Nonetheless, just like industry, nationality, geography, marital status, education and background, it appears that your age can have a large influence on how you approach your succession/exit plan.
For more information on Cottrill Arbutina’s Business Succession & Exit Planning Services or for a complementary consultation, please contact us.