State of Owner Readiness Survey

Minnesota business owners are growing more concerned about exit plans, survey says

The percentage of Minnesota business owners who consider exit planning a top priority has quadrupled since 2017, according to a new survey.

The 2023 Minnesota State of Owner Readiness Survey, sponsored by Minneapolis-based Sunbelt Business Advisors and done in conjunction with the Twin Cities Chapter of the Exit Planning Institute, showed that 28% of respondents stated that exit planning was a top priority — compared to just 6% in 2017, the last time the survey was conducted.

The survey contains data compiled from a 56-question survey of 309 business owners in Minnesota to determine their readiness to exit their business. True North Mergers & Acquisitions, an affiliate of Sunbelt Business Advisors, St. Paul-based OlsenThielen CPAs and Advisors and St. Cloud-based Dayta Digital Marketing served as partners in conducting the survey.

For Brian Slipka, CEO of Sunbelt Business Advisors, increase was notable, but showed there is more work to do.

“The number of businesses prioritizing transition planning has skyrocketed but is still really low,” he said. “We still have a long way to go to educate small business owners on how to transition their life’s work."

To that point, the survey showed just over half of Minnesota business owners have not established a formal transition team, and 39% are unfamiliar with their exit options. Though, when asked if having a transition strategy is important for the future of their business, 94% of respondents agreed with the statement and 58% said they “strongly agree.”

Slipka said events like the pandemic and economic uncertainty likely contributed to more businesses thinking more about exit planning. At the same time, he noted the boomer generation reaching retirement has elevated the conversation, which is opening the door for a younger generation of business owners with different ambitions and values.

“What is emerging is this really interesting entrepreneurial spirit within the younger generation, so you are seeing this younger generation really take the mantle of ownership seriously,” he said. “But what is different is they don't want it to be a big generational legacy for themselves. They are doing it more for the experience.”

MSPBJ article