In a recent conversation with a global business broker, we debated why 94.6% of companies started failing to sell. This is despite them having survived the early years, grown into sizable mid-market businesses and provided nicely for their founders.
He shared a dreadful reality with me that he referred to as the 6 D’s. Most of his clients looking to sell their companies come to him because of the 6D’s.
Death – the death of the owner or a significant partner in the business
Disease –contracting a disease that prevents the owner or business partner from being able to work
Divorce – a divorce that leads to the company having to be sold
Debt – debt that the sale of the company can only settle
Disenchantment – essentially, when every day becomes and feels like a slog and a grind in which you lose your passion.
Disability – a disability from an accident or some other event that prevents the owner from running the company
Pavlo Phitidis breaks down the 6 D’s for business owners in this Money Show podcast
The antidote to these unfortunate drivers of business sale is the 7th D – Design.
Designing your wealth creation path as a business owner is seldom done, and nobody wants to face their fate. There are four simple steps that a business owner must follow on this path to have success based on their end goal.
Time runs out for us all. Starting with the end in mind and building your business into an Asset of Value™ from the get-go is the best insurance plan you can hope to have as a business owner.