I am pleased to share the executive summary of EPI’s update of its groundbreaking 2013 study. As a Certified Exit Planning Advisor, I am encouraged by the 2023 findings of business owner preparation and readiness for transition.  As an advisor, my goal is to help owners focus on increasing value so they can exit on their terms.

Here are some highlights of the 2023 report. You can request a copy of the entire report at the end of this post.

In the ever-evolving landscape of business ownership, understanding the dynamics of generational shifts and their impact on exit planning is crucial. The findings from the 2023 National State of Owner Readiness Report shed light on the significant transformations occurring in the realm of business transitions and succession planning.

One of the most striking observations is the notable decrease in the average age of business owners, attributed to a significant influx of younger entrepreneurs entering the market. Unlike their baby boomer predecessors, younger owners demonstrate a proactive approach towards exit planning, recognizing its importance in safeguarding and transitioning wealth.

The report highlights a remarkable increase in awareness and preparedness among business owners, with a staggering 50% surge in contingency planning between 2013 and 2023. This shift is indicative of a growing understanding of the importance of having a comprehensive exit strategy in place.

Moreover, younger owners are actively involving family members in their plans and favoring internal exit options, particularly family transitions, over third-party sales. This trend underscores the increasing emphasis on preserving business legacies and nurturing familial ties within the entrepreneurial journey.

Furthermore, there has been a notable change in the perceived value of advisors, with financial advisors emerging as the most trusted source of guidance for business owners. This shift underscores the growing reliance on expertise and specialized knowledge in navigating complex business transitions.

Despite these positive trends, there remains a significant gap in estate planning, with only 30% of owners having an updated estate plan and 24% possessing a Will. This underscores the need for continued education and awareness initiatives to promote proactive planning among business owners.

The report underscores the pivotal role of Gen X and millennials in driving positive changes in exit planning practices. As the baby boomer generation continues to dominate the ownership landscape, there is a pressing need to address exit strategies to ensure smooth transitions and business continuity.

In conclusion, the insights from the 2023 National State of Owner Readiness Report highlight the evolving nature of business ownership and the importance of proactive planning in ensuring successful transitions. By embracing exit planning and leveraging the expertise of trusted advisors, business owners can safeguard their legacies and pave the way for a seamless transition of wealth and leadership.

To delve deeper into the findings of the report, click the button below and access the complete 2023 National State of Owner Readiness Report.