Dave on CNBC: Small Biz Owners Ignoring Succession Advice

Writing on the results of a joint survey by the Financial Planning Association (FPA) and CNBC , Lori Ioannou (@LoriIoannou1) reports that 78 percent of small business owners plan to/need to sell their business in order to fund anywhere from 60 to 100% of their retirement.  The survey found, meanwhile, that while 94% of financial planners had talked to their clients about preparing for succession,  only 30% of clients/owners had actually done so.  As Dave notes in the article:

“There is a huge perception gap among business owners of what it really takes to have a successful payday at the end of their career,” said Dave Yeske, CFP and managing director of Yeske Buie, a San Francisco-based advisory firm. “Selling a small business is not easy; it is very difficult to monetize a closely held business.” As he explained, that’s because most businesses are organized more like a job than an investment. The owner does most of the work, and the profits are more like a salary than operating income. As a result, potential buyers have a hard time figuring out the true value of the company.

The process of finding buyers turns out to be one of the biggest challenges faced by small business owners, with the majority ultimately choosing to sell to family members or employees.  Here’s Kate Rogers’ on-air summary: