In 2016, BEI conducted a survey of business owners to get a gauge on what owners believe regarding several aspects of their business exits. The result was The BEI 2016 Business Owner Survey Report 1, a representative overview of what owners have done and believe related to Exit Planning. Today, we will address the myth of the fearful, entrenched owner using the report’s results.
There’s a common assumption among many advisors that owners devote their entire lives to their businesses and never choose to depart. Another myth is that owners refuse to depart because they’re afraid of what life after the business holds for them. The BEI 2016 Business Owner Survey allowed us to debunk these long-held myths about business owners with one simple question: “If a buyer offered you enough cash for your business to provide you with complete financial security, would you sell today?”
The result of this question was both surprising and exciting:
75% said that yes, they would sell/transfer their businesses today if they received enough money to assure their financial security .
Unless your clients are outliers, most of them would sell or transfer their businesses today if they were assured financial security. This is outstanding news for Exit Planning Advisors.
Consider for a moment what’s most important to your business-owner clients as they approach a typical baby-boomer retirement age. When BEI asked business owners what they intended to do after they exited—and respondents could answer more than once—59% said retire , 43% said travel , and 39% said spend more time with family . Each of those wants requires an owner to attain financial security.
Given this information, we encourage you to directly ask your clients, “Would you sell your business today if you could achieve financial security?” If the owner says, “Yes,” your logical follow-up is, “What’s holding you back?” If the owner replies, “No,” you can ask, “Why not?”
Regardless of how your clients answer, you have an unparalleled opportunity to ask a series of follow-up questions, such as, “Would you be interested in exploring some actions to ensure that you can leave your business when you want, for the money you need, and to the person you choose?” Follow-up questions like this allow you to delve more deeply into your clients’ wants, positioning you to guide them through the most important financial decision of their business lives at a premium price.
Some advisors can’t imagine asking these questions of their clients. If you are in that group, you’re not alone. Many advisors initially think that they lack sufficient knowledge about what it takes to plan a proper exit. If this describes you, ask yourself, “What is holding me back from helping my clients address the biggest financial challenge/issue of their business lives?”
In the 20+ years that BEI has been training advisors as Exit Planners, we’ve found that one of the biggest reasons advisors remain silent, even passive, while the largest ownership transition in history takes place is a belief they do not know enough about (or have sufficient experience with) business Exit Planning. Technically, there is some truth to that belief, because no single profession, and certainly no single advisor, possesses all of the knowledge necessary to design and implement an owner’s Exit Plan alone.
However, that belief completely ignores BEI’s long and successful track record of training advisors from many professional disciplines to facilitate the Exit Planning Process. BEI has organized the complexities of an owner’s exit into concepts, designs, and tools that you can recommend to owners. The process demands a team of subject-matter experts who work together to implement those recommendations.
Exit Planning is not a one-person show. It is a team effort led by the Exit Planning Advisor, who is skilled in a coherent, organized, owner-centric process. BEI provides you with training to hone your skills and a process to apply to each owner’s unique exit. Our goal is to prepare you to reach out to owners and engage them—first in a discussion of their exits, then in a process that helps them achieve financially secure exits—with unwavering confidence.