According to a 2008 White Horse Advisors' survey of closely-held business owners, 96% percent of Baby Boomer business owners agreed that having an exit strategy was important, but 87% did not have a written exit plan. 
The consequences of not having an exit plan can include, among other things, lost opportunity, wasted time, effort & money as well as decreased business value. These consequences were illustrated in a recent client matter involving the unplanned exit of a majority shareholder.
A manufacturing business owned 80% by the majority shareholder, 12% by unrelated individuals and 8% by management.
The majority shareholder was forced into an unplanned exit when he suddenly passed away. Basic tax and estate planning was in place but no formal exit plan existed.
The estate now owned an 80% equity interest in a privately held manufacturing business. The beneficiaries were not active in the business and wanted immediate liquidity.
Management expressed interest in acquiring the estate’s 80% shareholding. Expecting a smooth and timely process, the beneficiaries decided to pursue a management buy-out (MBO) as opposed to a third party sale on the open market.
We were retained by the beneficiaries to provide an independent fair market value assessment as support for the price to accept in the MBO. Although the parties agreed on price, they could not agree on the transaction structure. After one year of negotiations the deal had not closed and the parties agreed that, due to external factors, the value of the business had declined over this period.
We were again retained to value the business for purposes of the MBO. The market value had in fact decreased by approximately 5% to 10%. Transaction structure was still a major issue as management had difficulties financing the transaction. Ultimately it took two years to finalize the deal.
The majority shareholder was not prepared for this involuntary exit. The beneficiaries of the estate assumed that a MBO would be a quicker and smoother process than pursuing an external sale on the open market.
Unfortunately this process took two years and the value of the business decreased over the course of extended negotiations. Significant transaction costs (accounting, legal and other expert fees) were also incurred by the parties over the two year process. In addition, an external sale to a strategic or financial buyer may have fetched more than that agreed to between the beneficiaries and management.
87% of business owners surveyed by White Horse Advisors in 2008 do not have a written exit plan, many of which do not appreciate the potential severe consequences awaiting them - neither did the majority shareholder in the above noted client situation!
_____________________________ Source: http://exitplanningresearch.com/Findings.htm