Exit planning is often overlooked by business owners, yet it can be crucial to a successful transition. Whether you’re a seasoned entrepreneur or just starting out, these statistics from the 2023 Q4 Market Pulse Report might change how you approach your exit strategy.
A majority of business owners fail to plan for their exit, exposing themselves to financial risks and missed opportunities. The numbers speak for themselves:
<$500K businesses: 74% did no exit planning
$500K – $1MM businesses: 67% skipped exit planning
$1MM – $2MM businesses: 63% failed to plan
$2MM – $5MM businesses: 57% had no exit strategy
Skipping exit planning can lead to lower valuations and unforeseen complications when it’s time to sell.
Even those who do plan often rush the process, moving from consultation to market in less than a year. However, proper exit planning takes time and should start well in advance of your intended sale date. Rushed decisions can lead to oversights and undervaluation, costing you in the long run.
It may seem logical that larger businesses with more resources engage in exit planning, but smaller businesses actually need it just as much—if not more. Owners of small businesses are often more personally and emotionally invested, making it harder to find successors and increasing the need for a thoughtful exit strategy.
Thus, a well-executed exit plan can make all the difference. Partnering with a business broker ensures you’re not navigating this complex process alone. My team and I can help you navigate and refer you to great advisors that can tailor exit strategies based on your business and personal goals.
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