As the largest generation in our country's history enters retirement age, many of the nation's private businesses owned and run by these Baby Boomers will need to prepare for a transition.  Robert Avery of Cornell University estimates that $10.4 trillion of net worth from private businesses will be transferred within the next 35 years. With so much competition in the transaction markets, it is imperative that owners position their businesses in advance, and learn about this expected wave of exits. 

According to Avery, "The majority of boomer wealth [in the United States today] is held in 12 million privately owned businesses, of which more than 70% are expected to change hands in the next 10 to 15 years."  With such an unprecedented number of exiting owners in all industries, having a comprehensive and customized exit strategy plan will be crucial.  It is a fact that not all Baby Boomer businesses or industries will survive the expected wave of exiting owners, with both the weakest businesses and least-prepared owners left unable to successfully sell or transfer their businesses.  

 Even if owners are not planning to sell their business, but instead transfer stock and control to family members or a management team, it is essential for tax and managerial reasons to begin these processes years prior to the anticipated date of departure.  Whether selling, transferring, or gifting a business, owners will be competing in the flood of near-term business exits, and should begin boosting company value in preparation.

The majority of an owner's wealth is often tied to the illiquid business, and an owner and his or her family may be dependent upon sale proceeds for the next step in life. In the emerging wave of exiting owners, only the exiting owners with strong business models and well-planned exit strategies will be poised for successful transfers and ultimately, a successful next stage of life.

There is urgency to this emerging market, with very few advisors currently trained and prepared to give advice on the traps, and possibilities of planning an exit strategy.  If the majority of your wealth is tied up in your illiquid business, a strong team of advisors will be critical to transforming that illiquid asset.  Consider working with an advisor trained in exit planning to help you with the largest financial and emotional decision you will ever make!