By: Kevin Leahy, Executive Director CEDR & CCC SBDC
It’s here. Can our local and regional economy overcome a storm of owner retirements?
I am one of those “Baby Boomers” born between 1946-1964. Do you know how many “boomers” are retiring a day nationally? 10,000! Or 4,000,000 per year. In our region, it is estimated that 70% of businesses are family-owned, many by baby boomers. How do things look for the future of your business if you keep things the way they currently are?
Here are some sobering statistics. Where do YOU fit….today?
- 20% of existing businesses are good enough to transfer without any additional assistance. Whether by sale, merger or through a generational transfer to a family member, qualified buyers with access to financing or capital will be ready to acquire the business.
- 50% are in the middle, or a crowded pool. Many could go either way. These are employer businesses that are likely to be profitable, but some just barely. The business represents the largest asset in the owner’s personal financial portfolio. Many have been affected by the economic downturn beginning in 2008 and are only now improving. Owners here typically over-value their business themselves, and have a rude awakening when it comes time to sell.
- 30%, or the bottom, are businesses under moderate to severe distress, and the only option may be liquidation unless change comes quickly.
Up to 80% of existing businesses are not ready for a transition event, an exit or generational transfer. This represents the middle 50% and the bottom 30% recapped above.
We need to plan for a different result. It’s difficult to solve problems if we aren’t honest with ourselves and others about the size and scope of the situation. Every community thrives or fails to do so in part because of the amount of local wealth that has been created, retained and put to use there. We need to work together as a community to connect and re-connect with family owned businesses. These owners need education, information and opportunities to find a transition program that fits their needs.
Clatsop Economic Development Resources, the Clatsop Community College Small Business Development Center , Astoria-Warrenton, Seaside and Cannon Beach Chamber of Commerce’s are partnering to host a “Succession Planning: Enhancing Value and Preserving Legacy” seminar on March 2nd or 3rd to bring to the forefront this critical business issue for our region.
Instructor Arnie Hendricks, with Financial Management Resources, is a well-known Management Consultant and CFO who has worked for 23 years with over 250 companies.
Arnie is a certified exit planner and a certified family business advisor who has worked with our CCC SBDC for over four years.
The three-hour workshop will cover an Introduction to Succession Planning, Enhancing Value, Review of Sellability Score Survey, Management Development, Personal Financial Planning and Life Transition Issues, Succession/Exit Options and Action Steps, and a 90 minute confidential one on one follow-up to discuss issues you may not want to discuss in a group setting.
The first workshop will be held in Astoria from 8:30-11:30 am on Monday, March 2nd at our main Astoria campus and on Tuesday, March 3rd in Cannon Beach at the Cannon Beach Chamber Community Room also from 8:30-11:30 am. (The same information is covered both days) Cost is just $49.00, and includes the results of the “Transition Readiness Assessment” and the 90 minute consultation.
This is a do not miss event, and a chance for our local business owners to explore a topic that could set the stage for a successful transition, especially if the timing for transition is 5, 10 years away, or longer. And, also an event you will be proud you attended.
To register, go to our CEDR website at www.clatsoped.com, and click on the events tab and go to the calendar for either March 2nd or 3rd, Email firstname.lastname@example.org for a registration link, or call us at 503-338-2402.