Within the next three years, almost half of middle-market business owners over the age of 55 will be looking to sell their business. The problem is, Orion Capital Group reports, 90 percent of them have not started the process.
“It is striking that a vast majority of owners prefer to sell to third parties, but only one in ten have initiated the planning process,” said Neil Shroff, managing director for Orion Capital Group, in a press statement. “Owners of privately-held businesses have many options, whether they want family members or employees to continue the business, or whether they prefer a sale. However, by waiting until the last minute to make a decision, many business owners unintentionally eliminate some of their best opportunities.”
Orion Capital Group also reports that while 71 percent of boomers surveyed indicate they will sell their business to a third party, only 9 percent will transfer it to a family member.
Research indicates reasons for the lack of preparation to sell include a lack of knowledge about available resources and lack of time. Additionally, although CPAs, attorneys, and financial advisors are available for help in exit planning, the survey revealed 77 percent of business owners were “unaware” that exit-planning professionals exist.