Do Your Business Owner Clients Have an Exit Plan?
According to the Exit Planning Institute 2023 National State of Owner Readiness Survey, a staggering 73% of owners want to exit their companies within ten years. However, the majority, 60%, are in the dark about their exit options, 80% lack a formal strategy, and 50% have no plan at all. Even more concerning, about 70% of businesses listed for sale do not sell. The urgency of the situation is clear, and tax professionals have a crucial role to play in addressing this issue.
This presents a tremendous opportunity to help owners in a way that has not traditionally been embraced by the CPA, Investment, Legal, Insurance, or Brokerage industries. But it just requires opening a conversation with something like, “What are you going to do when you no longer want to work?” Or “How long until you’d like to step away from your business?” If an owner is not thinking and preparing for this inevitability, their business will likely not transition under ideal conditions. Early preparation is key, and your role in initiating these discussions is crucial.
A Customized Approach to Exit Planning
At Savvy Business Brokers, we view business owners in three stages: Exploring, at least five years from exit; Pivoting, 3 to 5 years out; and Triggered, less than three years from exit. We have strategies and tools to help owners at any stage maximize their business value and readiness to sell.
Exploring Stage: Beyond Growth
For those over five years away from an exit, we realize they are still in growth mode but should still be educated on all their options. It’s also not too early to start building a team of advisors who specialize in business transition. We begin with a complimentary Range of Value Estimates, which gives them an idea of where their business stands in the current market.
Pivoting Stage: Preparing for Harvest
For those pivoting from a growth mindset to how they can harvest the wealth from their business, there is still time to clean up the books and implement systems to make the company more attractive to an acquirer—whether that be an internal OR an external buyer. Our free Readiness Assessment identifies owner priorities and areas to focus on.
Triggered Stage: Fast-Track Improvements
We take a “Minimum Effective Dose” approach for those under three years from exit. Without investing large sums in improvements with a long payback period, what steps can they take to get the most bang for their buck? Our Owner Centricity Quiz exposes the #1 value killer in small companies. Ultimately, the owner decides the best exit option, and we help them execute.
Facing the Silver Tsunami
It is said there is a “Silver Tsunami” coming from business owners looking to exit; Savvy Business Brokers can both help them prepare and execute their plan. As their tax professional, you are in a unique position to start the conversation, lead the exit planning team, and help transition the tidal wave of owner exits to the next generation. Your involvement can make a significant impact on the future of these businesses.