Thursday, June 6, 2013

The Perma-Five

A Chief Executive Boards International member was talking about selling his business sometime in the future. Another member asked, "When would that be?", to which he responded, "In about five years."  I could have almost predicted that answer.

Awhile back, I saw an interesting article that described the "Perma-Five" - the classic timeframe business owners give for when they're going to be ready to transition their businesses. Here's the author's description of Perma-Five:
"Perma-Five means that if I asked you a question and you answered five years from now you would likely still say five years if I asked the same question 3, 5 or even 10 years later. That is, of course, if you still didn’t know what the answer to the question was.
"Perma-five is a sign of something you’ve thought about but don’t have an answer to. You might believe that if you continue moving forward whatever needs to happen will magically happen."
The key word is "magically." 

Retirement planners hear the same number, when asking clients when they'll be ready to retire.  Why is that?  Well, it seems that humans know when they don't have a clear-cut path forward.  And, curiously, they also believe that somehow in 5 years they're going to get one figured out. So, that 5-year time horizon just keeps sliding forward.

I know a 73-year old business owner who's in the Perma-Five. He's been there for the 3 years I've known him. On his present track, he'll be in the same place when he's 78.

If you're stuck in a Perma-Five, click here for an article that may help you get off that treadmill: Do you have a clear-cut strategy and timeline for exiting your business? If not, isn't it time to get that figured out?

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Terry Weaver

Chief Executive Boards International
Chief Executive Boards International: Freedom for business owners & CEOs -- Less Work, More Money, More Freedom to enjoy it

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