Take Heed from These Eye-Opening Statistics

Sometimes, an entire story can be told with just a few numbers. That’s the power of statistics and data.

In business, statistics and data are becoming ever more important. They can give you a sense of how your business is doing today, how far it’s come and what the outlook for the future looks like.

For our purposes, though, we’re talking about selling a business, and statistics related to that topic. In this realm, there are some eye-opening statistics that every business owner should know. By fully grasping these statistics, it’ll help you as think about your long-term future in business, especially as you consider selling your company.

6 Exit Planning Statistics

Here are statistics every business owner should know, according to a recent study by the Exit Planning Institute:

• Roughly 4.5 million firms will change hands over the next decade.

That will represent more than $10 trillion in business valuation transitioning. But what’s glaring about that statistic is EPI says only 20-30 percent of businesses that are listed for sale will actually end up selling.

• 53 percent of business owners have given next to no thought to a transition plan.

That’s a scary statistic, especially since most of those polled in the study were 51 years old or older. What’s more, 88 percent of respondents had no written transition plan, and 66 percent had no transition plan of any kind.
It’s important that every business owner has a transition plan, even if they are still years away from exiting the business.

• Two-thirds of respondents said their number one goal for transitioning their business was to get full value for their business.

Yet, not even 40 percent of them got a formal valuation on their business in the past three years. What’s more, 65 percent have never even gotten an audit of their financial statements. It’s hard to get full value from your business if you haven’t even had a firm analyze what it’s worth.

• Almost all respondents have never gotten advice from someone about transitioning their business.

The study found 80 percent have never done this, in fact. This goes back to the point above – that most business owners try to do it all themselves. That’s never a good idea.

• One-third of the business owners said they haven’t thought about a succession plan for management.

And only one-quarter of the respondents said they’d be confident their current management team would run the business successfully if a new owner wasn’t intricately involved in the business after the sale. Without a good team in place that you can trust, and that a new owner can rely on, it might be hard to get full value out of your business in a sale.

• Less than half of businesses that have more than one partner have a buy-sell agreement in place.

The number is 48 percent, actually. What happens, then, when one partner decides he or she wants to sell? This is a situation you don’t want to get yourself in. Be prepared for all that could come your way.

These are just a few eye-opening statistics that every business owner should recognize so that they can avoid making similar mistakes. By heeding the warning of these statistics that came out of the EPI study, you can be better prepared to get the maximum value out of your business when it comes time to sell.

Our best advice? Don’t waste another day and talk to a Sunbelt South Florida broker today!

Sunbelt Business Brokers of West Palm Beach provides dedicated business brokerage services for all of your selling needs. Whether you are an established business owner nearing retirement and looking to sell, or an ambitious entrepreneur seeking your next investment opportunity, there is no reason to look beyond Sunbelt Business Brokers.

Visit us at 800 Village Square Crossing Suite 216 Palm Beach Gardens, FL 33410 or contact us at (561) 832-9222.