Small business owners plan to exit, but aren’t exit planning
Small business owners put their blood, sweat, tears and resources into building their businesses.
But when it comes to figuring how to make a graceful exit from the business, most are unprepared, according to a Securian-sponsored nationwide study of small business owners.
The Securian Small Business Owner Life Stage Study focused on successful private businesses in a variety of industries. The businesses surveyed in August and September 2015 have an average of 27 employees and annual revenue ranging from $250,000 to more than $20 million. Results of the study were released in April 2016.
The vast majority of small business owners don’t have a plan for exiting the business
72 percent don’t have a plan and aren’t taking action
Only 14 percent have a formal exit strategy in place
Another 14 percent are working on a plan, but haven’t completed it
A majority will leave within a decade
The exit is not that far down the road for most small business owners.
expect to leave the business within five years
anticipate being gone within 10 years
Selling or transferring the business is the most likely exit strategy
want to transfer the business to a family member
want to sell to a partner or key employee
want to sell to a third party
expect to close or wind the business down
The importance of planning
Don’t leave the future of your business to chance. Prepare yourself and your business for a graceful transition.