Exit Planning: Learning from Entrepreneurs Who Have Been There
The result of a successful exit often attributes back to proper timing. Ideally, it would help if you started exit planning 3-5 years out from your ideal exit date. Where is this time frame coming from? Consider the economic cycle.
Being proactive in your exit planning allows you to be in control of your destiny instead of finding your back against the wall with only a few exit options to consider. This not only includes planning but having several key players on your team to ensure your exit is successful, as well as understanding all the moving pieces to take your business to market.
Setting the Scene
Picture this: Fred Ezra, a recently exited business owner of a boutique brokerage firm. He reflected on his exiting experience in BisNow’s article on the challenge of competing as a mid-sized brokerage firm.
“We lost a lot of deals to the large companies,” Ezra said. Firms like Avison Young, Cushman & Wakefield, CBRE, and JLL have dominated the brokerage industry in recent years. They have presented many challenges to smaller firms like The Ezra Co. to compete.
As Ezra began to contemplate his exit, several factors weighed in on the future for himself and his company.
Considering all the Options
For example, his son Mark was the COO of the company for the past ten years but had his sights set on diving into the commercial real estate technology industry rather than brokerage.
“It was time for Mark to move on,” Ezra said. “He wanted to be in the technology end of real estate, and I was slowing down, and I wasn’t really putting my all into the company for the last couple of years and let Mark run it. But when he really wanted to do other things, that was one of the reasons that I wanted to divest myself from the ownership.”
Ezra also investigated the option of transferring the company’s ownership to other brokers in his firm. Still, they opted to seek jobs with some of the more prominent players in the game.
In the end, Ezra sold the rest of the company’s remaining assets to Avison Young and was ultimately able to retire from his 50-year commercial real estate career.
What Can We Learn?
The big question is: what can we learn from Fred Ezra’s experience in exiting his company? What could he have done differently to maximize his exit strategy?
Ezra’s faith in his mid-sized brokerage firm and ownership transition assumptions ultimately led to his exit planning procrastination. If Ezra had given himself enough time to plan and thoughtfully consider all his exit options, he might have ended up in a different, more ideal situation for his retirement.
Key takeaway: the time to start exit planning was yesterday. As a business owner, the more time you allow yourself to plan for your exit, the less likely you’ll be running around at the last minute trying to figure out what is best for your company’s future.
Want to learn more? Our Guide to Selling Your Business eBook dives deeper into how important it is to expect the unexpected and everything you need to consider to exit your business like a rockstar.