The Numbers
Here is an estimate of the opportunities that exist in businesses in the U.S.
- 12,000,000 closely held businesses in the US
- 4,400,000 are successful entities
- 1,750,000 (40%) are dealing with ownership and business transfer issues
- 577,500 (33%) plan to sell to a third party
- 577,500 (33%) plan to sell to family members
- 315,000 (18%) plan to sell to employees
- 280,000 (16%) plan to just close their doors
As an owner have you discussed exit ideas with your CPA? Many advisors are not equipped to handle this phase of the business lifecycle so the natural tendency is to avoid talking to clients about these issues because it is outside of their comfort zone. Using a trained professional for these efforts is a financially sound step to take because it can begin to establish the proper timelines and steps needed to prepare for an exit even if that transition is still many years away.
As an advisor are you talking to clients about their business exit plans? In theory, if these numbers are representative of the average firm’s client mix, about 15% of your clients are probably thinking of or taking some steps toward a solution to their exit plans. If your firm has higher quality, more successful clients the opportunities are probably greater.