Research Shows Entrepreneurs Are Motivated apt Exit Their Businesses, But Confused About Options

Research Shows Entrepreneurs Are Motivated apt Exit Their Businesses, But Confused About Options

Despite chaos approximately exit strategies, 47 percent of middle-market business owners 55 years and older are amused in selling their businesses among the next three years, additionally over 90 percent of them have not begun the planning process, along to research unlocked today by MidCap Advisors, a guiding medium market investment banking firm. Approximately 70 percent of those surveyed denoted they were interested in selling their business to a third party, 11 percent wanted to migrate their business to household members, and 9 percent indicated they were interested in selling to management or employees.

“It is troubling that a heap of owners choose to sell to third parties, yet only 10% have begun the planning process,” said John Poppe, Partner by MidCap Advisors and a Certified Exit Planning Advisor. “Owners of privately-held businesses have several another alternatives to help them acheive their objectives. Unfortunately, by waiting until the last minute to make a decision, many business owners unintentionally eliminate some of their best opportunities.”

The research revealed that 40% of business owners said that they were no conscious of how or when to begin the exit planning process. Another 30% of business owners said that they knew they should be developing an exit plan but lacked the time to do it.

Exit planning is a multidisciplinary process that asks and answers always of the business, personal, legal, tax, and monetary questions involved in successfully exiting from a privately owned business. The MidCap Advisors survey underscores the magnitude of synchronizing the efforts of CPAs, solicitors, and financial advisors in advance of an exit to determine these issues are addressed in an integrated and comprehensive style. “Each of your advisors holds a chip of the mystery. Exit planners and M&A advisors help coordinate the process and eligible the pieces attach to develop a comprehensive plan that they help administer and execute,” said MidCap's John Poppe. “Start a talk with an investment banker who is exercised in exit planning process. An early dialogue is not a commitment to sell, but it’s quite important because business owners to understand what options they have and what they can and should do when those options are available.”

While many business owners are eager to sell, the research revealed that paying tariffs and lawful fares were top concerns of owners contemplating one exit. Over 23 percent of business owners said they felt the taxes and legal fees involved in the sales process were the maximum important ingredients in deciding to sell. According to Poppe, “Careful blueprinting tin dramaticallly decrease the money a business landlord needs to disburse in taxes and legal fares. Capital acquire taxes and legal fees are typically maximum while a business employer does mini alternatively no perfected planning”.

Business owners who are waiting to sell cited many reasons, with 50 percent citing present mall conditions, and 24 percent indicating they were waiting to build profits. “The correct timing is important,” Poppe annotated. “A agreeable exit plan aids business owners know how and when to period the markets by coordinating the business owner's private goals, where the business is in its life-cycle, and overall market conditions.”

The Exit Planning Institute conducted the research for MidCap Advisors by compiling and analyzing data from surveys done by MassMutual, PriceWaterHouseCoopers, ROCG, and Marquette University. The Exit Planning Institute administers the Certified Exit Planning Advisors or CEPA designation.

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