The pandemic’s impact on the way we do business is extensive and in many ways it is permanent. Rather than deter you from developing a solid exit plan, COVID-19 emphasizes the need for one and gives you more reason than ever to plan for your future, your family’s future and the future of your business.
Demographic experts predict that *over 75% of business owners plan to sell and/or transition ownership of their business in the next 10 years. These businesses have an estimated value of over $10 trillion dollars culminating in the largest generational transfer of wealth in history.
The reality is that around 49% of business owners don’t have an exit plan in place to prepare for the transfer of their business. This is an alarming statistic when you consider that **80% of small businesses are liquidated when the owner decides to exit.
The process for creating a viable plan does not need to be an overwhelming, stressful experience. In fact, having a plan in place will certainly alleviate the related stress and have a positive impact on how well you sleep at night.
Is your business ready
for the largest
of wealth in history?
For business owners, the keys to a successful exit are simple - planning and aligning the 3 most important factors: 1) Personal goals 2) Business issues and 3) Personal finances. Let me explain.
The most common objections to creating an exit plan that I hear include:
- “I’m not sure how to start the process”
- “I’m too busy putting out fires”
- “The exit planning process seems too daunting”
- The fact is that the results of good exit planning will far outweigh the inconveniences:
- You control how and when you exit
- You maximize value in good and bad times (despite market conditions)
- You keep more of what you get rather than pay taxes
- You have better control over confidentiality
- You have strategic options to choose from (but you need to identify what those are)
The cost of not preparing an exit plan is simply too steep. With more than 25 years of experience, our firm can develop a plan for you that acts as a roadmap to a smooth transition. We help you address your specific business and personal goals, reduce anxiety, and provide peace of mind.
By John W Davis, CPA, CEPA CFP®, CVA, PFS. John is the Managing Partner of Davis & Hodgdon Associates CPAs. He is also one of Vermont’s only Certified Exit Planning Advisor (CEPA). John spends most of his time dealing with small business clients and the issues they face – from recommending structure for various types of entities, to improvement of business processes, and with a special focus on strategic exit planning, sales and acquisitions, and business valuations.
*Exit Planning Institute
**Small Business Administration data per the Exit Planning Institute.