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The State of Owner Readiness

| April 04, 2018
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All business owners have at least two things in common: they start businesses and they exit businesses. While most owners know this and, at least mentally, intend to scale back or exit their business within 10 years, the majority have not implemented a plan to receive maximum value when they exit or explored what exit options they have.

The Exit Planning Institute, a leader in business owner exit planning, conducts “State of Owner Readiness” surveys across the country.1 Of the business owners who completed the Georgia survey, 91% indicated they agreed with this statement: “Having a transition strategy is important for my future as well as the future of the business.”2
However, these same owners are not well prepared to transition:

  • 91% had no written plan for what they would do after transitioning.
  • 81% had no written company transition plan.
  • 54% had done no planning at all.
  • 84% had not established a transition advisory team.
  • 64% are not familiar with all their exit options.
  • Only 60% indicated that had some comfort that existing management would be successful with new ownership.
  • Only 8% had a business valuation completed in the last two years (though 58% thought they had a good idea of what their business is worth).

These results are nearly identical to those found in other markets.

Being unprepared for exit or transition leads to bad exit experiences. This has led to the fact that only 20-30% of transitions are successful. Additionally, a 2012 PriceWaterhouseCoopers survey found that 75% of owners who sold their business were dissatisfied a year later and only 5% were happy with their net proceeds.

Level Four Advisory Services offers a robust Exit Planning Process that guides business owners through transition no matter the timeline. We believe Exit Planning is simply good business strategy as owners build value in structuring their business to be able to be successful, even if they are not or cannot be involved at the same level they have been. Our process helps educate and implement strategies, including:

  • Reviewing the range of value for your business.
  • Assembling your transition team (financial advisor, M&A attorney, estate planner, CPA, investment bank, etc.)
  • Completing Personal and Business assessments.
  • Growth enhancement consulting.
  • Mitigating and managing risks to company value.
  • Discussing which of the seven exit options may best apply to you.
  • Align your exit plan with your personal, financial, and business goals.

1 www.exit-planning-institute.org/resources/state-of-owner-readiness
2 EPI State of Owner Readiness Report 2018 Georgia

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