I think your age has a big effect on your attitude toward your business, and how you feel about one day getting out.
A friend of mine runs a boutique mergers and acquisitions business. M&A people get the majority of their compensation when a transaction happens – which is why he refuses to take on assignments from business owners over the age of 70.
Septuagenarians, he has found, are so personally invested in their business that they can't bring themselves to sell.
They'll get three-quarters of the way through the selling process and call it off, claiming they simply wouldn't know what to do with themselves if they sold.
I talked with a lot of business owners while researching my book Built to Sell: Creating a Business That Can Thrive Without You.
While it is always dangerous to generalize – especially on things as touchy as age – a few patterns emerged in my research.
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 got downsized or packaged off into early retirement, and that caused a somewhat jaded attitude towards the role of a business in society.
I think business owners in their twenties and thirties generally see their companies as a means to an end, and most expect to sell in the next five to 10 years.
Similar to their employed classmates who move to a new job every three to five years; business owners in this age group often expect to start a few companies in their lifetime.
Aged 47 to 65
Baby boomers 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 I spoke with in this generation thought of their company as more than a profit centre. They saw their business as part of a community and, by extension, themselves as a community leader.
To many boomers, the idea of selling their company feels like selling out their employees and their community. That's why so many chief executive officers 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.
Older business owners grew up in a time when hobbies were impractical or 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 nothing 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, there will always be exceptions to general rules of thumb but I have found that, more than your industry, nationality, marital status or educational background, your birth certificate defines your exit plan.
Special to The Globe and Mail
John Warrillow is a writer, speaker and angel investor in a number of start-up companies. You can download a free chapter of his new book, Built to Sell: Creating a Business That Can Thrive Without You.
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