Exit Planning Still Lacking

Market Pulse Survey – 4th Quarter 2018 Presented by IBBA, M&A Source and in Partnership with Pepperdine University

Even though retirement leads as the number one reason for sale, most buyers do not engage in a proactive planning process, particularly in the Main Street market.  Generally, the smaller the business, the less likely the owners are to do any advance planning prior to their listing engagement. 

Of the sellers that do plan ahead, most are still moving through the exit planning process at a rapid pace, with less than a year between initial consultation and market listing. 

Figure 10. Proactive Exit Planning

“The value in planning ahead cannot be overstated. Tax planning alone is essential. Without pre-planning, you could end up owing far more than you’d have to. Business value can swing significantly based on how you organize your financials in the last year or two before a sale. And that’s saying nothing about the other value drivers important to buyers.”

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