Study Shows Small Business Owners Are Ignoring Opportunities for Succession Planning

By Neel Shah, Trusts|Estates|Law posted 04-20-2015 10:25


According to CNBC, the baby-boom generation and are approaching retirement has been a threat for decades. These days, however, it’s easy to see how the many individuals retiring on a daily basis is influencing our economy as a whole. Every month, more than 250,000 Americans reach age 65. Nearly 20% of this group reports that they are presently retired, which is an increase from the 10% of individuals aged 65 entering retirement in 2010. 

These numbers also have implications for small businesses. It’s expected that around 10 million small-business owners have plans to close or sell their businesses within the next decade. These business sales will be a critical source of retirement funds for the business owners.

Up to 80% of small business owners today plan to sell their businesses in order to fund their retirement. These same business owners see their business sale at the potential to find out for all of their retirement needs. Despite this vast interest in selling a business, less than 30% of small business owners have an actual written succession plan. This most recent statistic comes from a national survey of 182 financial advisors.

While business owners clearly see the benefits in selling what they have built, there’s a knowledge gap regarding the importance of succession planning. Without a proper plan in place, a business owner who is counting on the sale to fund retirement could be putting his or her future in jeopardy.

Are you a small business owner? We can help you get started thinking about the need for succession planning. Contact us at [email protected].