Jon Parry, local attorney, recently earned the credential of Certified Exit Planner from the Business Enterprise Institute. Parry completed five months of training, in-depth coursework and rigorous testing to earn the designation.
"Exiting your business is a transaction you will only make once," says Jon Parry, CExP™, local attorney. "The stakes involved can’t be overestimated. As a second-generation business owner myself, I know the personal sacrifices owners make, putting all their time, energy, and money into their business. Through the years, I’ve seen what can happen when owners don’t plan for their exit. They often work far longer in the business than they really want to. They might not receive the money they need from the business exit to fund their retirement. Sometimes, they simply close the doors, let the employees go, and liquidate the business. My mission is to help business owners make their exit successful and end up leaving their business in style."
Planning to make a graceful business exit is crucial, because according to Tom West, author of The Essential Guide to Pricing a Business, fewer than 25 percent of small businesses, defined as revenue under $10 million annually, are ready to sell when offered in the marketplace. Those who plan ahead are more likely to be able to sell their company when the right buyer is identified.
"It was important to me to earn the CExP™ credential because I see so few business owners who have a comprehensive plan to sell their business or pass it on to family or employees,” Parry continues. “With no plan, business owners risk experiencing unnecessary stress and loss of control over their business and finances. Through proper planning and coordination among other advisors, such as CPAs, financial planners, and business brokers, the business owner may be able to reduce taxes that threaten the business and the owner’s future lifestyle, or find a strategic buyer. Owners need a roadmap that details the steps they will take in successfully transitioning out of their business, accounts for possible challenges along the way, and includes strategies for growing the value of the business."
“Exit Planning Professionals who successfully complete the BEI Certified Exit Planner program have come to be known as premiere Exit Planning Professionals because their in-depth knowledge and demonstrated application of the BEI Seven Step Exit Planning Process™ perfectly positions them to counsel business owners and their advisors on a wide array of business issues ranging from building value within a business to identifying exit objectives, addressing key employee incentive planning and retention issues, incorporating business continuity planning, and establishing wealth preservation,” said John Brown, President of BEI, based in Golden, Colorado.
The matter of business exit planning is made even more important by the aging of the baby boomer generation. Members of this generation, who were born between 1946 and 1964, are reaching retirement age at a rate of 10,000 individuals per day, nationally. As a result, according to BizHarmony, about 40 percent of family-owned businesses in the United States are expected to experience a change in leadership over the next five years.
"With more baby boomer-owned businesses for sale in the marketplace, careful exit planning, including competitively pricing your business, is crucial for a successful sale," says Parry. "For those who wish to pass the business on to their children, taking the proper steps to allow the younger generation to take a leadership role, and doing planning to make it affordable for them to take ownership, is crucial for a successful transition."