Freebies to Make Life Financially Simple
August 2, 2017
Who Are the Professionals Involved in Building A Business Owner’s Exit Strategy?
August 3, 2017
If you’ve been on this website much you have more than likely seen the mention of my designation: CEPA. Now, you are probably wondering “what is a CEPA?” So in this article, I am answering multiple questions: what a CEPA is and the value to people in the business world.
A Certified Exit Planning Advisor is a credential that you earn after going through an MBA-style program. First, you need to know what exit planning is to understand what they do. Exit planning is preparing for the sale or transition of your business and fulfilling this desire. The technical definition that the Certified Exit Planning Institute uses is “Exit planning asks and answers all of the business, personal, financial, legal and tax questions involved with transitioning a business by combining planning, strategies, and concepts with a process.” A process is vitally important. Ultimately exit planning relies on a very simple strategy to grow your business so that it’s transferable.
Let me explain the definition in my “financially simple” terms… we need to grow our business so that we can sell it or give it away. It’s that simple.
How do you do that? Because the topic of this article is why exit planning is important, not how. We’ll explore the “how’s” in other articles.
The Troubling Business Numbers – the WHY I Do What I Do
Currently out of the 20 million business in the U.S., six million are employer companies… companies that have employees. As I was researching information to inform my clients, the stats I found shocked me (and these numbers are a major reason I worked to earn the CEPA certification). We’ve all heard that experience is the best teacher, so let’s look at those experiences:
- 3 our 4 owners “profoundly regret” selling their business. That’s 75%!
- 70-80% of businesses that go up for sale, never sell.
- 30% of family businesses survive to the second generation.
- two-thirds don’t know all their exit planning options. That’s 66%!
- 78% of business owners don’t have a transition team.
- 83% of business owners don’t have a written transition plan.
- 49% have not done ANY basic financial planning!
- 86% of owners haven’t strategically reviewed their business for growth.
- 40% of owners don’t have a plan for the 5 D’s: death, disabled, divorce, distress, disagreement
- and even more troubling stats at the Certified Exit Planning Institute.
When I learned these numbers, they so haunted me that I decided I would devote my business life to changing them… one person, one business at a time. A great way to help you and others like you is to have as many tools as possible, and the education gleaned through receiving the CEPA certification is one step toward my goal.
So what are you going to do? Are you going to rise above the numbers or be yet another statistic? A good place to start improving your odds is by visiting our Building a Sellable Business educational series.
