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Exiting your business
yourbiz article and questionairre
Winston Brill - article
Workshop to address aging workforce
The Daily Tribune
Wednesday, October 25th, 2006 09:06:52 AM
HIBBING — As companies across the region face an aging work force, it is important to capture and retain employees’ valuable knowledge before they retire.
A workshop will be held at Hibbing Community College (HCC) Thursday, Oct. 26, to address future workforce challenges, such as aging workforce, knowledge transfer, and recruitment, retention and succession planning.
“We hope to help employers prepare for changes that are going to be coming up,” said Tom Gregorich, of the Customized Training and Continuing Education Department at HCC. “A lot of people are retiring. Therefore, how are they going to replace them and how are they going to retain the knowledge and experience that those retiring employees have, and transfer that to new employees. That is basically the main idea of the workshop.”
Gregorich pointed out that 30 percent of the working population in the Arrowhead Region is older than 50; that number is 26 percent in the United States, and 25 percent in Minnesota.
You may say to yourself, “Why would I design an exit strategy when I still enjoy being in this business?” Think of it this way: your business is an asset in which you have invested money. It has a revenue stream that supports your salary and possibly a sizable distribution of yearly profit. It should be increasing in value so that when the time comes, you will be able to harvest additional wealth. Planning an exit strategy is the most commonly overlooked consideration of a business strategy, yet the exit strategy plays a key role in determining the strategic direction for the company. By not planning an exit strategy beforehand, business owners, their heirs, or their successors may find that the options in the future are limited. Some entrepreneurs think of their exit strategy as the means by which the business transitions to the next major stage. From this perspective, the entrepreneurs do not necessarily leave the business, but their role changes significantly. Exiting Means Achieving Your Highest Goals “I began to see my exit strategy less as a termination, and more as a logical part of the high goals I had set for both my company and myself,” stated Jennifer Lawton, owner of Just Books, Inc. “I may pursue an acquisition, take the company public, merge with another concern, methodically increase sales to a higher level, or shoot for rapid 200 percent growth. In achieving any of these goals, I will have, in fact, ‘exited.’ My company will have moved from one phase to the next, its ‘exit’ from one level becoming its ‘entrance’ to the next. The reality is that unless you define that end or change, your business may change in a way that wasn’t in your plan.” Choose an exit strategy that aligns with your business and personal goals. “You should be thinking about your exit strategy the day you start your business,” says attorney Garrett Sutton, author of How to Buy and Sell a Business. “By keeping the issue of exiting in mind as you build your business, you will have the flexibility to handle the exact strategy at the appropriate time.” To prevent your business from taking a path other than the one you intended, you can integrate an exit strategy into your business’s vision, goals, and strategy. Just because you define your exit strategy now doesn’t mean you have to execute it anytime soon. Some entrepreneurs use their exit strategy three, five, or twenty years later. As the owner, you should determine the expected outcome, parameters, and results before you exercise the strategy. Benefits of an Exit Strategy Besides having peace of mind that you can exit the business profitably, other benefits of having an exit strategy in place include: Protecting the value of the business you have built. Creating a smooth transition to your management team or family members. Generating a potential income for retirement or disability. Enhancing the future worth of your business. Reducing or deferring the potential tax impact on your estate, spouse, or family. Creating a strategic direction for your business’s growth. Types of Exit Strategies A successful business builds wealth for its owners by accumulating assets and building future profit potential. The most common favorable exit strategies are to sell the business, sell the assets of the business, merge it with another business, or sell shares in the business to the public at large. Unfortunately those entrepreneurs who do not plan an exit strategy will one day exit from their businesses unprepared. Some entrepreneurs exit the business for reasons other than wealth, retirement, or the desire to pursue other goals. Death, disability, family circumstances, and divorce from partners sometimes lead to an early exit. Without an exit plan, entrepreneurs who want a favorable outcome for themselves, their heirs, or their employees may find that their exit is other than what they wanted it to be. If at First You Don’t Succeed . . . Mo Siegel, founder of Celestial Seasonings® based in Boulder, Colorado, faced some challenges when planning to exit his company. Siegel had grown Celestial Seasonings to become the largest herbal tea manufacturer. Siegel purposefully created an entrepreneurial culture that encouraged new ideas for tea flavors from employees, established a fun and family-like work environment, and was rated one of the most socially responsible companies in the United States. When Kraft® bought Celestial Seasonings in 1984, Siegel watched his company’s culture change significantly. Many of the staff that Siegel had personally recruited left. The quality of life and passion that he had created for so many people slowly disappeared. Even though the company met all of its business goals, Siegel felt his exit had not accomplished what he wanted for himself, his staff, or the community. In 1988, when Kraft was negotiating to sell Celestial Seasonings to Lipton®, Siegel decided to buy it back from the corporate giant. In 2000, Siegel merged Celestial Seasonings with Hain Pure Foods® to form The Hain Celestial Group. He had found a company who shared Celestial Seasonings’ vision, not only for the business but for its people, and knew he could finally retire to pursue another personal dream—hiking the last set of 14,000-foot Colorado mountains he had yet to climb. To ensure he had made the right decision for his company and staff, he stayed on for two years to oversee the transition between the companies.
Any perception that starting your own business is ‘just for men’ has been shattered by new figures that show women are the dominant entrepreneur in the capital. Male-run City start-ups account for about 10% of new companies, falling short of the 16% founded or run by women, according to fresh data covering the first six months of this year. Female-run businesses are springing up faster than businesses founded by their traditional rivals not just in the City, but also in the East Midlands, and Yorkshire – where they outnumber male-run firms the most. Positively for enterprise the new figures, from Barclays Bank, reveal that the number of new ventures set up by both sexes has leapt 10% to 205,000 - compared with 183,000 a year ago. But it is women who are leading the pack, to the extent that if they continue their rate of adoption, more women than men will be starting-up firms by 2010, The Daily Mail claimed yesterday. “I am sure in a few years time, that in some areas of the market, more businesses will be started by women than men,” said a more cautious Jonathan Davies, a director of Barclays Local Business said in a statement. The bank’s figures show there is still some way to go before female entrepreneurs can compete on a national level – as over 140,000 firms have been set up by men, compared with 38,100 by women. Overall, more people this year than in 2005 year have been registering companies in the motor, wholesale and retail trades, which increased by 15%, rising from a total of 30,700 to 36,300 new businesses. For women however, the property services industry has proved particularly appealing, as have the immediate sector bedfellows such as interior design and property development, Barclays said. In the creative industries, there has been a marked increase in the number of artists, marketing consultants, web designers and traditional designers (graphic & advertising) offering their services, according to Yellow Pages. The business directory identified such companies as ‘typically being run by women’, saying the listings suggest that the UK is now home to a new type of female entrepreneur – dubbed ‘the kitchen table tycoon.’ Accompanying analysis from the London School of Economics suggests these ‘work-from-home-mums’ are responsible for annual sales of nearly £4.5billion – a combined turnover that exceeds some FTSE100 companies. The majority of these women set up their own business thanks to skills they developed in permanent employment, with the most enterprising ex-employees typically aged between 26 and 30. Giving birth to a child emerged as a key trigger to start a business, as women responding to the LSE said their new arrival would demand more flexibility in their day-to-day career. The overwhelming majority said they felt ‘satisfied’ or ‘very satisfied’ with their decision to ‘go it alone’ from home, while others said they had been less daring and launched the business with their partner. However, it’s not all plain sailing, as a significant number complained they now have less time for themselves – ‘me-time’, their partners and household chores. “Women are spotting an opportunity and seeing it as their way of managing their own career which gives them the flexibility that working for a corporate business might not,” said Jonathan Davies, reflecting on Barclays’ latest figures. He reportedly added: “With a new business it is particular important to put the customer first. Women are very, very capable at doing that. I hate to resort to stereotypes but, when it comes to empathy and customer service, women tend to be better.”