According to a recent survey conducted by the Twin Cities Metro Area Chapter of the Exit Planning Institute, 99% of the business owners who completed the survey in the Twin Cities region indicated that they agreed with this statement:
“Having a transition strategy is important both for my future and for the future of the business.”
Despite 99% of the business owners indicating that they agreed with this statement (and almost 61% indicating they strongly agreed), the following information was indicated:
- 79% had no written business transition plan
- 48% had done “no planning at all”
- 94% had no written personal plan
The state of transition planning is very weak, although a large segment of business owners also indicated that they would like to transition their business within 5–10 years.
Owners must realize that a successful transition requires that they start planning well in advance of their exit to maximize the business’s value and have an appropriate amount of time to prepare financially and personally.
The biggest regrets many owners face include the following:
- They realize that they should have integrated a value acceleration process to prepare themselves and their business much earlier.
- They realize after the fact that they left money on the table by not maximizing the value of the business at the time of exit.
If you fall into the 79% that have no written business transition plan and would like more information, contact our Exit Planning team.