Last week we asked our Advisor community, “What percent of owners indicated they strongly agreed that having an exit strategy is important to their future and the future of their company?” Here are the results:
21% said 30% of Owners
10% said 55% of Owners
17% said 60% of Owners
52% said 75% of Owners
EPI Vice President, Scott Snider, provides a deeper look into this trivia:
According to the State of Owner Readiness Survey (SOOR) we found that 60% of owners strongly agreed that having an exit strategy was “important to their future and the future of their business”. Looking deeper, we found that when adding up the “levels of agreement”, meaning somewhat agree, agree, and strongly agree that 99% of owners agreed in some form with this statement. Some would say in reading this that there is no way owners would not agree with this. They likely say this because the other side of the equation speaks something completely different. The same SOOR report said that nearly 80% of owners had no written transition plan, 50% had not planned at all, and 94% of owners had no plans to do anything post-business. Simply put, though they seemingly agree that exit strategy is important, they are not doing anything about it. So how important is it to them really?
To me, exit planning is about values and goals. Do your values, the way in which you live, match the goal you are trying to achieve. We always hear, especially at the beginning of each year, people sharing their fitness goals. “I want to lose 30 pounds.” Yet as the year progresses through the first quarter, they begin to miss their workouts and don’t change their eating habits. So how important is this goal to you? Your values don’t match your goals.
However, I think it’s different for business owners in this situation. I think they do want to exit their company. They want to make sure they take care of their customers and employees. They want to harvest the largest financial asset they have at some point. Hell, they need to! But they are not doing anything about it currently because they don’t know what to do or how to do it. They do not speak Value Acceleration and think that exit planning is not an immediate need, so they push it off and procrastinate. And then one day exit smacks them in the face and they say, “what to do I do now?”
As advisors to business owners, we need to recognize that 99% of owners agree that exit strategy is important. We need to begin educating business owners on the concepts and process that live actively in their business culture and impact their personal and financial plans daily. If we do this, we put companies and their owners on a pathway to significance.
