Article
Heading for the exit – A private company owners’ perspective
March 9, 2021 · Authored by Michael Milani
The last 12 months have been difficult for most private company owners, leaving many wondering if it is time to exit their businesses. However, successful exit plans require a strategic and tactical approach, often requiring assistance from outside specialists.
There is no shortage of challenges and roadblocks faced this past year that are causing company owners to reconsider their future plans. Some of these challenges include:
- Managing the ongoing impact of COVID-19
- A change in administration
- Concerns with employee health and wellness
- Uncertain financial performance
- Understanding and obtaining Paycheck Protection Program (PPP) loans
- Maneuvering through recession and recovery
- Keeping productivity and morale up in a remote work environment
- Navigating supply chain and customer disruptions
Combined, these challenges have created a near perfect storm. However, despite the chaos, many companies and their owners have been resilient and resolute about getting back to business and in many cases, financial performance is almost back to early 2020 levels.
As private company owners look to 2021 and beyond, there is a growing focus on exiting the day-to-day management of their businesses. This can be done by hiring professional management, transitioning ownership and management to the “next generation” of family, or by a sale.
Other factors that are entering into the exit dialogue include:
- I’m done – Many owners no longer want to bear the effort and risks of their business
- Vacation home effect – Some owners who have spent time working remotely have enjoyed their flexible schedules and time with family and friends (in many cases socially distanced)
- Death and taxes – According to Benjamin Franklin, “In this world nothing can be said to be certain, except death and taxes.” Many owners are at or near retirement and are concerned about the potential for higher corporate, personal income, capital gains and dividend taxes
