Exit Planning: $15 Trillion In Privately-Owned ‘Baby Boomer’ Business Wealth

‘State of (business) Owner Readiness’….was the title of a survey conducted by The Exit Planning Institute (EPI) and its (Phoenix) Arizona chapter in 2017. The objectives of this exit planning survey were straightforward, i.e.,

  1. identify the states – stages of ‘exit planning’ readiness of business owners, and
  2. encourage surfacing more of the wealth the businesses have accumulated. https://kpstrat.com/wp-admin/post.php?post=266

A conservative estimate is that $15+ trillion of largely privately-owned wealth will be in transition… ala ‘baby boomer’ business owners which should translate to exit planning par excellence which absolutely must include the array of intangible assets each business has accrued.

The execution of this survey included…identifying relevant intangible (non-physical) assets and their respective contributory role and value to the privately-held businesses’ wealth creation, competitive advantage, and revenue generation.

The reality that $15+ trillion of wealth…is currently in some stage, or will soon be poised to transition – exit, should, in my view, represent opportunities for professional service firms to ensure that…

  • effective exit plans have been developed, and
  • each plan fully incorporates the value of foundational – contributory intangible assets a business has developed, acquired, and accumulated.

Identifying – surfacing these intangible (asset) sources of value and wealth have relevance to every business owner, because…operational familiarity with company’s intangible assets is now a business imperative due to…

  • the economic fact that today, and for the foreseeable future, 80+% of most company’s value, sources of revenue, competitiveness, and sustainability, etc., either lie in or emerge directly from intangible (non-physical) assets, not tangible (physical) assets.
  • unfortunately however, there remain large percentages of business owners who assume, or, are ill-advised to dismiss their intangibles insofar as accounting and their contributory role, value, and cumulative wealth creation, notwithstanding, their contribution to competitiveness and creating sustainable sources of revenue.

Very prudently, the EPI Arizona survey compared its findings to…EPI’s National Survey, as well as other regional (EPI) surveys conducted over the previous four years. Doing so, added substantial (nationwide) credibility and relevance to the survey’s findings.

A particularly distinctive – worthy feature of the EPI Arizona Survey…was that individual business owners, nearing exit-transition, were encouraged to offer suggestions, aimed at other business owners, as gestures to improve the probability of achieving – structuring more successful (and lucrative) exit – transition planning.

Those suggestions, among other things, included strategies and encouragement to ‘bring to the surface’…and assess-value each business’s (internal) origins-sources of wealth, i.e., those created by intangibles they had developed and nurtured, but, recognize – incorporate same as foundations to a businesses value, sources of revenue, and competitive advantages, etc.  Doing so, would variously ensure intangible assets would be fully incorporated in exit planning and elevate their level of wealth.

Relevant facts…

  • there are approximately six million privately held businesses currently operating in the U.S.
  • collectively, these companies represent approximately $30 trillion in annual sales which conservatively translates to $15 trillion in (accumulated personal) wealth.
  • according to US census data, ‘baby boomers’, i.e. people now ranging in ages 53 to 71, own 63 percent of those 6 million privately held companies and businesses.
  • the data suggests ‘boomers’ are holding on to their businesses (not fully exiting) for longer periods of time.
  • this translates to nearly four million ‘boomer’ owned businesses are currently variously poised to transition to an exit.
  • assuming conventional business valuations are 50% of annual sales, this does not wholly account for – incorporate the value of accumulated (contributory) intangible assets.

Obviously, the continuity between business ownership and exit planning matters…not just to the families of business owners, but also to their employees, vendors, customers, charities, vendors, customers, and communities in which the company resides and contributes to its economic and social well-being.

Given the significance of intangible assets in business owners’ (overall) wealth portfolios…their (exit – transition planning) advisors’ inclination to recognize and their ability to monetize – exploit the wealth – value created by a businesses intangibles, is, there should be no question, integral to effective exit – transition planning, especially when planning commence well in advance of officially executing an exit plan. Be assured, doing so, and in this manner, will have a significant impact on owners’ financial security and lifestyle, post exit.

The significance of the business (tangible and intangible) asset valuation and their inclusion in transition – exit planning…carries substantial strategic importance that extends well beyond business owners and their family, e.g.,

  • failure to effectively provide for the continuity of a business owners assets, i.e., both tangible and intangible,
  • not only affects owners’ personal wealth, but also the various stakeholders who depend on a business owner’s(fiduciary) responsibilities to transition to an effective and successful exit.

Of course, what happens when businesses – business owners do not engage in effective transition – exit planning, in numerous instances…

  • business owner’s life’s work may be liquidated for a fraction of its real value, and
  • the business shuts down, employees lose their jobs and the various stakeholders – beneficiaries incur losses unnecessarily.

Historically, and, unfortunately, in the U.S. today, the successful business transition – exit rates lies only in the 20% to 30% range…these findings (collectively) emerged from surveys conducted by (the)

  • Exit Planning Institute.
  • PricewaterhouseCoopers.
  • Alliance of Mergers and Acquisitions.
  • Business Broker Press, and
  • Family Firm Institute.

So, obviously, the need to increase the number of successful transitions-exits…has some urgency, because, ‘boomers’, as it happens, currently own-hold nearly two-thirds of all privately held businesses approach the inevitability of aging and the not-so-coincidental desire to successfully and lucratively exit their business.

  • of note, as of 2017, boomers’ ages ranged from 53 to 71, with an average of 62 years!

Yes, boomers are holding onto their businesses longer…than previous generations, but that reality does not dismiss – excuse them from neglecting preparing for their business transition and exit.

Instead, boomer business owners are obliged to recognize…that transitioning – exiting their business is an important, necessary, and a prudent task, if not fiduciary responsibility. After all, for most, establishing a sound exit plan is a once-in-a-lifetime activity, that requires focus, action, and time to do properly.

As consistently commented in this blog….80–90 percent of most business owner’s net worth is likely to be ‘in their business’…however, as an intangible asset strategist and risk specialist, it is absolutely-essential for readers (business owners) to give credence to – incorporate this economic fact in the exit planning…

  • it is an economic fact today, that 80+% of most company’s value, sources of revenue, competitiveness, and sustainability lie in – emerge directly from intangible (non-physical) assets, not tangible (physical) assets!

When this economic fact is dismissed and not fully integrated in exit planning processes…‘boomer’ business owners can anticipate their $15 trillion in accumulated wealth may not fully surface, or, if it does, it will be revealed in fractions of its real contributory value. https://kpstrat.com/wp-admin/post.php?post=5928

Michael D. Moberly July 7, 2018 St. Louis [email protected] ‘The Intangible Asset Blog’ (https://kpstrat.com/blog) where one’s attention span, business realities, and solutions converge!

Readers are invited to examine other relevant resources, i.e., papers, books, blog posts, etc., I have published at https://kpstrat.com/books/


  • This report originally titled THE STATE OF OWNER READINESS 2017 ARIZONA REPORT was conducted and written by Christopher Snider and the Exit Planning Institute. The contents of the report provided many insights to Michael D. Moberly, author of this post.
  • Contributing authors to the report were…
    • Kimberle Dyer, the President of the EPI Arizona Chapter and the Cofounder of Keystone Capital Management Group.
    • the Arizona Owner Forum Council.
    • Joseph Evers of Evers Robinson LTD
    • Norman Lemus of UBS Financial Services.
    • David Noosinow and Anthony Tanner of BNY Mellon Wealth Management, and
    • Rick Wilcox of Point North Group LLC.


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