I’ve been talking about the concept of perma-five for years as it relates to when a business owner wants to leave their business. Simply stated, perma-five is the state a business owner is when they don’t know how they’re going to leave their business or if they can afford to leave it.
I know when someone is in perma-five when I ask them the question how long will it be till you want to leave your business? When the answer is five years (and often it is five years) I know the owner really doesn’t have a good strategy for how and if they will leave their business.
I was talking about this principle with one of the Advisors in our firm last week. He mentioned that he also has the same issues with his Clients. When he asks them when they want to retire, he knows that if they answer five years, they don’t have a good plan for retirement.
In both situations I think it’s important for business owners and people who are thinking about retirement to have a plan. Or if you don’t have a plan, I think it’s important to know that you don’t have one and it’s possible that you will have to work longer than you want or run your business for more years than you thought you would.
Planning never gives you the final answer. It does give you some ideas about things you can think about, strategies you might want to consider and tactics that could help you achieve your goals. The important thing is knowing where you are today and what changes, if any you’ll have to make if you want to retire or leave your business.
Staying out of perma-five is an important thing for many people. Many people don’t want to go another five years and still be answering the when you’re going to retire question with five years……BTW, that would make it ten years from now.