How many businesses need an exit strategy?    

There are nearly 20 million businesses in the United States today.  Many exiting owners are surprised to learn that only a fraction of one percent of those businesses have grown to a size where they were able to 'go public,' i.e. offer their stock to the investing public.  This means that the majority of businesses in the United States are privately-held and will need a process other than an Initial Public Offering (IPO) of stock in order to achieve liquidity or turn the company stock (or assets) into cash.

A Wide Base of the Triangle

The majority of businesses in the United States today are 'small' businesses - enterprise values of less than a few million dollars.  The following chart illustrates the wide base of small businesses relative to the very small number of large, publicly traded businesses (organized by the number of employees within each organization)  

2004 U.S. Census Bureau Statistics

Implications for the Exiting Business Owner

The statistics offered here contain both good news and bad news.  The good news is that you are not alone in needing a plan for the exit from your business.  The bad news is that you are not alone in needing a plan for the exit from your business.  What this means is that as more and more Baby Boomers exit these businesses through retirement, the supply will likely outweigh the demand for business ownership.   

Exit Strategy Planning Advisors

Ask yourself how many 'exit strategy planning' advisors you know of.  The answer is probably 'none.'  The significance of this dichotomy of demand for this service versus the supply of trained advisors should encourage you to ask, 'Who is going to be available to assist me with the exit from my business?'  In other words, how will you go about establishing a plan for the exit from your business?

Size Matters