As a business owner, timely and proper exit planning is vital to the success of your exit outcome. Exit Planning Institute recently released the 2023 Minnesota State of Owner Readiness Research in collaboration with the EPI Twin Cities Metro Area Chapter, True North Mergers & Acquisitions, Olsen Thielen CPAs and Advisors, Dayta, and Sunbelt Business Advisors. This research comes just 6 years after the 2017 Twin Cities Metro Area State of Owner Readiness Research and highlights the growth in exit readiness in the state.
Exit Planning Institute President, Scott Snider, shares, “As compared to the 2017 Minnesota State of Owner Readiness Survey there are some drastic changes to the business owner segment. We know owners are more prepared, or at least more aware, than 6 years ago so our efforts to educate business owners have worked. Now how can we focus more on the 40% of owners who have spent little time and attention on their exit? Certainly, our work isn't done, but over the last 6 years it has been wildly impactful.”
Explore some of the top statistics from this new research and how it compares to our 2017 report below!
When asked how they would describe the attention they have given to their exit, Minnesota business owners have increased their attention in the past six years. In 2017, only 6% of business owners stated that exit strategy is a top priority for their business. However, 28% shared as much in the 2023 report.
Additionally, over 65% of owners in this year’s survey have given exit strategy some or high attention. With the increase in attention to exit strategy, a remarkable 94% of owners in Minnesota shared they have some form of an exit strategy in place based on our survey results.
This increase in exit planning strategy and awareness can be correlated to a larger percentage of business owners in Minnesota completing some form of formal exit planning education. Compared to our 2017 report, 16% more owners have completed some exit planning education in 2023.
This increase could be from the highly successful EPI Twin Cities Chapter. The Twin Cities Metro Area Chapter of the Exit Planning Institute has been active for seven years, consistently organizing annual educational events specifically for business owners and their teams. These events include the highly impactful Business Owners Forums held annually for the last five years.
In 2017 only 27% of the responding business owners had a formal advisory team in place to assist in their business and exit planning. Based on our 2023 report, 49% stated they have an advisory team in place to work through their exit strategy.
When asked who the owners view as their most trusted advisor, our 2023 respondents indicated their Financial Advisor filled this role. Other top advisors were their Lawyer, Accountant, and another business owner or an owner peer group.
The core transition advisory team for a business owner should contain, at minimum, an attorney, CPA, financial advisor, and growth consultant. Additionally, one of these core advisors to the owner should hold an exit planning credential that trains them within a framework, process, and system such as the Certified Exit Planning Advisor® (CEPA) credential.
61% of business owners in our 2023 Minnesota State of Owner Readiness Survey stated they were aware of all their available exit options. Conversely, in 2017 only 35% of owners were aware of their exit options.
When the 2023 Minnesota State of Owner Readiness Survey respondents were asked to dive deeper into those exit options, 57% expressed a preference for an internal exit, indicating their intention to transition the business to someone within their company. 27% preferred an external exit, meaning they were open to selling the business to an outside buyer.
In addition, 76% of business owners from this year’s report indicated that they believed their business was ready to transition while only 25% of the Minnesota owners in 2017 believed as much.
See what other changes in owner readiness are evident in Minnesota in the 2023 Minnesota State of Owner Readiness Report. Request the Report through the form below!