Business Owner Research

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Business Owner Research

We have curated nine pieces of information, data, and/or statistics surrounding the primary reasons that owners exit (sell) their business, and we have also provided nine pieces of information, data, and/or statistics surrounding the ways, and why, small business owners should be planning their exit strategy from the moment they purchase a business. All research is United States focused, and surrounds small businesses.

Small Businesses: Reasons Owners Exit/Sell

  • The BEI 2016 Business Owner Survey reveals that one of the most common exit paths used by business owners is transferring the company to key employees or management. Thirty-one percent of business owners in that report specified that they were interested in pursuing a transfer to key employees or management. This exit strategy was only outdone by a third party sale which represented 59% of responses. It should be noted that the participants in the survey were allowed to choose more than one exit path.

  • Key findings from this four year old report found that most business owners want to exit their businesses within the next decade (79%), and most business owners have not created a concrete, written plan for their exits (83%). For the 2019 report, this dropped to 56% of business owners that want to sell or transfer their ownership within the next ten years, and slightly dropped to 79% of business owners that do not have a written plan for the future of their business ownership. In a startling difference, while 75% of small business owners reported back in 2016 that they would sell their business if their financial security were assured, the 2019 results revealed that just over 58% of business owners would sell if their financial security were guaranteed, which is a substantial drop.
  • Moving more fully to the 2019 Business Owner Survey Report, some interesting findings can be observed surrounding the reason why owners would consider exiting their business. The participants in the study were asked two closely related questions. One: Under which conditions do you anticipate transferring ownership of your business to someone else?...and... Two: Which of the following do you think is the most likely scenario for transitioning ownership of your business? While fully shown in the graphic below, the three primary reasons for both questions appears to be when they find a buyer and/or successor that meets their requirements (40%/27%), when they are financially secure enough to retire, which would include any sales proceeds (31%/11%), and when they reach a specific age (15%/7%). When the business owner could no longer work for health reasons came in at 11%/6%.

Small Businesses: Planning an Exit Strategy

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