Almost half of business owners 55 years and older say they want to sell their business within the next three years. But more than 90 percent don’t have the first clue on how to do it.
“It is striking that a vast majority of owners prefer to sell to third parties, but only one in ten have initiated the planning process,” says Neil Shroff, managing director for Orion Capital Group, which conducted the survey. “Owners of privately-held businesses have many options, whether they want family members or employees to continue the business, or whether they prefer a sale. However, by waiting until the last minute to make a decision, many business owners unintentionally eliminate some of their best opportunities.”
The main reason why most have not initiated their exit planning is due to a lack of knowledge about available resources; 77 percent of business owners were unaware that exit-planning professionals like CPAs, attorneys and financial advisors actually exist. While this creates an opportunity to start dialogue between boomer business owners and exit planners/intermediaries, the biggest obstacle cited in the selling process were tax and legal fees.