We are excited to release a new regional State of Owner Readiness Report for the first time since the 2021 New York State of Owner Readiness Report. We recently conducted research on business owners in Colorado to measure their readiness and attractiveness in terms of exiting their business.
What is a State of Owner Readiness Report?
The State of Owner Readiness Report is an analysis of data collected from business owners in Colorado 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 shut 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. The results also allow professional advisors the opportunity to conduct comprehensive exit planning conversations.
This research study has been conducted in over 11 markets across the United States. Through the 2022 Colorado State of Owner Readiness™ Report, EPI will provide Colorado an inside look at statewide owner readiness. This includes notable risk factors reducing the potential salability of these companies as well as insights that current owners can use to improve their individual exit success probability.
Partnership with The Colorado Employee Ownership Office
The Colorado Employee Ownership Office at the Office of Economic Development and International Trade (OEDIT) has partnered with the Exit Planning Institute to conduct the research for the 2022 Colorado State of Owner Readiness Report.
The Employee Ownership Office first connected with EPI in 2021 with an opportunity to partner on this research. In the next decade, six out of 10 business owners plan to sell their business. This research will allow businesses across the state to best prepare for succession and consider all their options, including employee ownership.
The Employee Ownership Office will launch a tax credit program in addition to their current funding opportunities in early 2022 to support business owners in their transition.
The Colorado Office of Economic Development and International Trade
The Colorado Office of Economic Development and International Trade (OEDIT) works with partners to create a favorable business climate that encourages dynamic economic development and sustainable job growth. Under the leadership of Governor Jared Polis, we strive to advance the State’s economy through financial and technical assistance that fosters local and regional economic development activities throughout Colorado. OEDIT offers a host of programs and services tailored to support business development at every level. This includes business retention services, business relocation services, and business funding and incentives. Our office includes the Global Business Development division, Colorado Tourism Office, Colorado Outdoor Recreation Industry Office, Colorado Creative Industries, Business Financing & Incentives division, the Colorado Small Business Development Network, Cannabis Business Office, Colorado Office of Film, TV & Media, the Minority Business Office, Employee Ownership Office, and Rural Opportunity Office. Learn more at oedit.colorado.gov.
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.
Notable Insights from the 2022 Colorado State of Owner Readiness Report
Owner Demographics
The Colorado State of Owner Readiness survey was completed by over 400 business owners in Colorado. The response group was relatively split equally among three generations; millennials, Generation X, and baby boomers. Our sample represented approximately 29% under the age of 42, 37% between the ages of 42 and 57, 33% between the ages of 58 and 76, and 1% 77 years of age or older. Nearly 72% of the owners surveyed reported that their business was 100% family-owned, an increase of 5% over our previous State of Owner Readiness Surveys from across the nation, but down 18% when compared to the United States Census Bureau data.
Transition Readiness
When asked if “Having a transition strategy is important for both their future and the future of their business” 95% of Colorado owners surveyed indicated that they agreed with this statement. 55% stated they “strongly agree.”
However, 68% of the owners stated they have spent minimal time and attention on their exit. What causes this disconnect and how can owners improve their exit readiness?
Attend the Research Launch Event: September 13, 2022
Join EPI, the EPI Rocky Mountain Chapter, and the Colorado OEDIT on Tuesday, September 13 between 2-6 PM MST at 11th Floor Space at 675 15th St, Denver, CO 80202. This space is provided courtesy of Michael Best & Friedrich LLP.
Attendees of the launch event will be the first to receive the new State of Owner Readiness Report.
Attend the Event!
Can’t make it to the event? Read the most recent reports from New York City and Nebraska to see how owner readiness has changed in the past few years.
