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The 2022 Colorado State of Owner Readiness Report is Released!
by Colleen Kowalski on September 13, 2022
The Exit Planning Institute has been a leader in exit planning research since our first National State of Owner Readiness Report in 2013. Since that report, we have released over 10 regional reports highlighting owner readiness, exit options analysis, and business attractiveness of owners across the country.
We are excited to announce that the 2022 Colorado State of Owner Readiness Report is here! We surveyed over 400 owners from Colorado and analyzed their responses to create an in-depth look at owner readiness.
See how prepared Colorado owners are to exit their business, read key insights from Exit Planning Institute President, Scott Snider, and how this data will positively impact all Colorado businesses through the Colorado Office of Economic Development and International Trade (OEDIT).
What is a State of Owner Readiness Report?
The State of Owner Readiness Report is an analysis of data collected from business owners to determine their readiness to exit their business.
This year we asked business owners about their transition teams, business exit timelines, and the importance of a transition strategy. The data in the report highlights the importance of educating business owners about exit options. After reading the report, professional advisors should apply the results to their practice and utilize this valuable information about emerging client markets.
What happens if the business does not successfully transition? The alternative is a business shuts down. People lose their jobs. Families suffer. Communities suffer. In addition, in many cases, the owner’s life work is liquidated for pennies on the dollar. Exit Planning provides owners with the knowledge they need to effectively transition their business to the next owner. The data collected in this year’s State of Owner Readiness Report provides a look into the mind of a business owner and allows professional advisors the opportunity to conduct comprehensive exit planning conversations.
Are Owners in Colorado Prepared to Exit?
Of the over 400 business owners who responded to our Colorado State of Owner Readiness Survey:
• 68% indicated they have spent minimal time and attention on their exit
• 48% shared they have no written personal financial plan
• 65% stated they have no formal or written transition plans
• 23% expressed they have not even considered a plan
• 78% said they do not have an exit focused team of advisors
As owners across all generations begin thinking about transition and agree that transition planning is important to their future, they lack action that leads to appropriate planning. Though 95% of owners in this sample agree that transition planning is important, 32% of them indicated they have spent little to no time on their transition plan because they are too busy growing their company.
What Do Owners Plan to Do Post-Exit?
Though the majority of owners in this sample group stated they had done minimal to no personal planning, 60% of the respondents did indicate they had informally thought through what could be next for them. Ranking the highest with 41% of the business owners responding that they would simply retire. Additionally, 30% said they would like to consult with other business owners, and 24% shared they would like to do philanthropic or community work.
Read the Full Report
EPI and OEDIT wish to thank Cresset Capital, Denver Agency, EOS Worldwide, Newport Advisors, Quist Valuation, Ready for Next Advisors, RWO Law, Sales Xceleration, SDR Advisors, SES ESOP Strategies, and Wealth Point, for their continued support of this research which will benefit businesses both in Colorado and nationally.
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