Headwinds

It doesn’t matter how well you start if you fail to finish. –Billy Sunday (1862–1935)

Bicycle riders appreciate the importance of avoiding headwinds on a long ride, especially as they approach the end. A headwind causes a rider to either expend more effort or take more time to arrive at a destination. When a rider is already tired, neither option is appealing.

A bike race and owning a business are remarkably similar when it comes to headwinds. As we anticipate the end of our business ownership journeys, the headwinds we face today require us to devote more effort or time to exit our businesses in style.

All owners typically face three significant headwinds that increase the difficulty of a successful business exit. One is the economy, the stagnation of which can throw even the best Exit Plans off course. The second is the substantially higher tax bill that’s due upon the sale of a business. The third is the long-term mediocre investment climate that depresses the amount of income owners can expect from their sale proceeds and other investments. Combined, these three headwinds wreak havoc on an owner’s ability to cross the finish line at all, let alone as he or she originally planned.

Compared to the pre-Great Recession period (1975–2007), these headwinds can double (if not triple) the time and effort that business owners need to create and preserve financial security when they exit their businesses.
Let’s look at how each of these headwinds affects your efforts to leave your business in style and which actions you can take today to minimize their effects.