The majority of BabyBoomer CEOs intend to exit in next 10 years but only 5% are ready!
In the US alone, there are over 17 million BabyBoomer CEOs. They readily confirm that they want to exit their business [someday, later, 10 years from now] to enjoy the reinvention (not retirement) they’ve been dreaming of… Ask them in 5 years or at age 65 and their answer is unchanged!
There is a complete disconnect in the minds of these BabyBoomer CEOs of closely held businesses, between when they want to exit their business and when they must start planning that exit. Somehow it’s ‘supposed’ to happen, as simple as turning on a switch.
“Closely-held companies constitute one of the most important, dynamic and growing segments of the U.S. economy.” According to CMI Research, these businesses:
- account for nearly half of private sector payroll,
- generate approximately 80 percent of net new private sector jobs in the last 10 years and
- produce more than 50 percent of non-farm private gross domestic product (GDP).
The statistics are alarming of how many CEOs are unprepared, ignore, deny or procrastinate on planning their own exit strategy.
Here are just a few of the numbers from a survey done by White Horse Advisors in cooperation with Vistage International (CEOs):
- 75% had more than 50 percent of their net worth tied up in the business
- The majority did not know the value of their business
- 85% had no exit plan whatsoever (those who did were all over age 65)
- Most anticipated selling their business at a “round” age like 50, 55 or 60
- 85% said they would sell now if they were “sick, losing money, the competition was killing them, or they got a great offer”
Among the BabyBoomer CEO subgroup:
- More than half (53%) of Baby Boomer business owners intend to exit in the next 10 years.
- More than half of those Baby Boomers (55%) expect to sell their business to a third party, while 20% expect to sell to employees.
- Only about one in seven (14%) expects to pass the business to family.
And yet, planning for that exit is not on their agenda, it’s not on their priority list!
Selling or scaling a business is not like selling a house. To successfully execute your business exit strategy can take two years or more. There are more players involved, more options and opportunities to choose from and more decisions to make.
Your success depends on how soon you execute your exit strategy.
Kerri Salls
Exit Strategist
