The study, which analyzes nine in-depth interviews with women whose businesses generated $4 million or more annually in revenues, is a companion to the quantitative report released in 2006, Exit Strategies of Women and Men Business Owners, also underwritten by MassMutual.The interviews reinforce the findings of the previous study and detail how these women handled exiting their businesses and their ensuing life choices.
“This study fills a gap in research on women’s entrepreneurship,” said Margaret A. Smith, chair, Center for Women’s Business Research.“There is very little research on women’s transitions from business ownership, how they accomplish it and how they go on with their lives. The first person accounts provide the stories behind the numbers.The research showed that most women and men business owners did not have any exit strategy.This is unfortunate, because when times got hard, those without a plan in place were more likely to close their business or settle for less than optimum returns.”
Further, the majority (67 percent) of women and men surveyed had no sales plan in writing and a large proportion (43 percent) had not conducted a formal valuation of their businesses.
The women interviewed who didn’t have a plan couldn’t act quickly enough when markets changed and consequently lost the option of selling.Their only option was to shut their doors.Among those who were able to sell, the most satisfied were the ones who had clear goals and parameters which allowed them to position their companies and choose their strategies accordingly.
“The study confirms the value of involving knowledgeable financial services professionals in the business planning process,” said Susan W. Sweetser, vice president, Focus Markets, MassMutual. ”The guidance they provide is invaluable and can be the difference between a successful exit with a secure retirement and an unsuccessful exit with an uncertain future.”
Exit planning is typically measured in years.It takes time, with the help of both expert and informal advisors, to determine the value of your company and the best way and time to exit. Almost all the women in this survey had at least one trusted advisor.
Many tapped into their networks of
entrepreneurial associates for advice and almost all relied on their CPAs or
attorneys.
The following are among the top recommendations of women who have exited their
businesses:
- Run your business every day as if it is for sale.
- Be aware of your goals and parameters – know what you
will accept in a sale and what’s not okay.
- Don’t let the word get out prematurely to your
employees and others that you are considering a sale; often the sales
process can take a long time and until all details are worked out, it is
best to not worry your employees.When ready to sell, be very decisive.
- Find a buyer who shares your vision and approach and
put many of the conditions of the business and the sale in the sales
documents. Get buyers’ promises
during the courtship in writing.
- Take care of yourself.Develop an investment and insurance portfolio
separate from the business that will be there no matter what.
Editors
Note:The following women were interviewed
for this study. The list includes the names of the companies they either sold,
closed or passed on to their families.To arrange an interview, contact the Center for Women’s Business
Research.
Kathryn Kerwin Clayton
- PennTech Transfer Corporation
Sheila Cluff
- The Oaks at Ojai Spa
Ana Maria Fernandez Haar
- IAC Group
Laura Henderson
- Prospect Associates
Kay Henry
- Mad River Canoe
Nana Luz
- Lotus Printing
Lillian Lincoln Lambert
- Centennial One
Dianne H. Patterson
- Claim Services Resource Group Inc.
Yvonne Shaheen
- Long Electric Co., Inc.
About the Center for Women’s Business Research
The Center for Women’s Business Research provides data-driven knowledge that advances the economic, social, and political impact of women business owners. We do this by setting the national agenda; creating insight on the status and achievements of women business owners; altering perceptions about the economic viability and progress of women-owned enterprises, and driving awareness of the economic and social impact of this vital business sector.For more information, visit www.womensbusinessresearch.org .
About MassMutual
MassMutual Financial Group is the fleet name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliates, with more than $450 billion in assets under management at year-end 2006. Assets under management include assets and certain external investment funds managed by MassMutual's subsidiaries.
Founded in 1851, MassMutual is a mutually owned financial protection, accumulation and income management company headquartered in Springfield, Mass. MassMutual's major affiliates include: Oppenheimer Funds, Inc.; Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; MML Investors Services, Inc., MassMutual International LLC and The MassMutual Trust Company, FSB. MassMutual is on the Internet at www.massmutual.com .
