Why Do You Need an Exit Plan for Your Business as an SME Owner
A business is a commercial establishment that operates efficiently and generates profit, even without its owner being present. Based on this definition, as a business owner, we believe you now understand why you need an exit plan for your business.
But there’s more.
According to KOSGEB, SMEs make up 99.7% of our country’s economy, and their average lifespan is 25 years. This means that when the owner passes away or decides to stop working, the business often follows suit.
The fact that companies, which form 99.7% of our economy, disappear in such a short time explains why our economy constantly struggles with sustainability.
In Turkey, we frequently hear SME owners explain why they started their businesses with statements like:
"I started this business to contribute to my country. Then I thought I could leave it to my children, securing their future."
However, this is often followed by another statement:
"I imagined leaving the business to my team or children after 10 years, taking a world tour on my boat, and enjoying life. But 15 years have passed, and I’m still doing everything myself, working day and night. I haven’t been able to start that world tour yet!"
The key to building a profitable business that generates increasing free cash flow lies in making an exit plan as a business owner and not clinging to your business.
This doesn’t mean closing your business after trying for a year or two. Please don’t misunderstand.
It typically takes about 10 years for any business to run smoothly and generate profit without the owner’s direct involvement. In other words, it takes approximately 10 years to reach the point where you can earn passive income from your business and embark on that boat tour. If you take the right steps in business management during these 10 years and build your business in a way that generates cash without your constant involvement, your business can provide the wealth you desire and enable you to take that world tour.
Otherwise, it will produce stress and illness instead of cash.
Without an exit plan for your business, you’ll go to work like a regular employee every day, struggle to delegate tasks, and eventually face burnout. Forget the boat tour; you’ll most likely end up in a hospital instead.
Research on the health of SME owners shows that these brave and valuable business owners, who form the backbone of our economy (and the global economy), face health challenges due to four main reasons:
- Disproportionate workload, with 12–16-hour workdays
- Financial uncertainty, especially unpredictable fluctuations in revenue
- Psychological pressure from a lack of business management knowledge
- Poor nutrition and lack of exercise due to time constraints and excessive workload
As an SME owner, you started your business with great dreams—for yourself, your children, and your country. For your business to provide the contribution you desire to yourself, your loved ones, and our nation, you must build it on a system aimed at scaling free cash flow rather than revolving around you.
A free cash flow scaling system is based on four pillars from the day your business is established:
S – Strategy
I – Implementation
C – Cash
T – Team
If you focus on these four pillars consistently from the day you establish your business, you can exit your business with your pockets full within approximately 10 years (this time can be reduced to 5 years with a systematic approach to these principles). You can leave the dream company to your children and embark on that world tour with peace of mind.
How close or far are you to exiting your business as an SME owner?
Is your business ready to continue without you, or is it not?
Call us…
In just 2 hours, let’s measure how ready your business is for your exit with our "How Ready Is Your Business for Your Exit?" test, and let us guide you on how to safely prepare your exit plan.
To your well-being and success in the business world,
Business Coach for CASH
Your Business Coaching Team