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The First Comprehensive Look at Metro SMB Readiness Is Live

By Brian Martucci
Fri, 2017-03-17 13:31

The Twin Cities Owners’ Forum has come and gone.

By all accounts, the event was a success. Dozens of metro-area SMB owners gathered to learn about maximizing the value of their most important asset – their business – and review the ins and outs of “the exit,” that elephant in every corner office.

In his keynote address, Exit Planning Institute president and CEO Chris Snider outlined four key areas of intellectual capital essential to maximizing business value and discussed some easily replicated strategies for measuring intangible capital – a potential make-or-break for business owners looking to the exits. If you missed his talk, the next best thing to do is download a free copy of Snider’s book, Walking to Destiny.

The Owners’ Forum wasn’t EPI’s only Minnesota coup of the week. EPI also released its long-awaited 2017 Twin Cities Metro Area State of Owner Readiness survey (SOOR), an exhaustive, first-of-its-kind look at metro business owners’ preparedness for the inevitable transition out of ownership. (Turns out three things are for sure: death, taxes, and leaving the family business at some point.) Exit-readiness matters because, per data cited in the survey itself, the average small business owner locks up 80% to 90% of their financial wealth in their businesses – and, even more troubling, only 20% to 30% of ownership transitions are successful.

The survey makes for great reading – definitely worth a download for middle-market business owner. Some big-picture takeaways:

  • 68% of metro businesses are owned by Baby Boomers, the oldest generation remaining in the labor force (as defined by the Census Bureau)
  • 80% are over the age of 50
  • 71% are wholly family owned
  • 79% are family controlled (majority of voting stock owned by family members)
  • 48% intend to exit/transition within the next five years
  • 91% “agree” or “strongly agree” that “having a transition strategy is important both for my future and the future of the business”

And yet…

  • 79% have no written exit/transition plan
  • 73% have no formal advisory board or transition team
  • 48% have done no exit/transition planning at all
  • 57% are “less than confident” of their transition-readiness

Sounds like there’s work to be done here. Again, check out the full service report – it might be just the call to action you need.

EPI Didn’t Do This Alone

Undertakings like the SOOR survey don’t happen in a vacuum. A slew of metro-area EPI partners supported the final product:

  • Exit Planning Institute’s Twin Cities chapter
  • KeyeStrategies, led by EPI Twin Cities Chapter predisent Julie Keyes, CEPA
  • MCM Capital Partners, Bobby Kingsbury
  • CliftonLarsonAllen, Jeff Servais
  • Lindquist & Vennum, JChristopher Cuneo
  • IWC Family Offices, Todd Ganos
  • BMO Harris Bank, Liam Higgins
  • Prudential Capital Group, Peter Pricco
  • VisionOne High Performance Group, Michelle Bonahoom
  • Vercor, Rob Gales
  • The Alliance of Mergers & Acquisitions | Minnesota Chapter

So did the Association for Corporate Growth, a national middle-market advocacy group with a strong presence in Minnesota.