“State of Owner

Readiness”©

2016 Updated Survey Results

Patrick C. O’Brien MBA, CEPA

PNC Wealth Management

EPI National Advisory Board

© 2013 Exit Planning Institute

Stakes are Enormous

“Age Wave”

First boomers turned 65 in 2011;

10,000 turn 65 everyday; the

youngest are now 51. Average 60.

Own 63% of the private businesses

in U.S.

80-90% of their wealth is tied up in

their businesses

EPI recent survey confirms: 76% plan

to transition over the next 10 years;

48% in the next 5 years

Represents a transfer of 4,500,000 businesses and over

$10 trillion of wealth

Historical Success Rates

12 months after selling, 3 out of 4 business owners

surveyed “profoundly regretted” the decision.

70-80% of private businesses put on the market don’t

sell.

Only 30% of all family-owned businesses survive into

the second generation; 12% survive into the third

generation; and only 3% operate at the fourth

generation and beyond

3.0%

24.0%

40.0%

27.0%

7.0%

What is your current age?

< 40

40 - 49

50 - 59

60 - 69

> 70

75%

12%

5%

3%5%

What is your company's annual

revenue?

< $5M

$5M to $25M

$25M to $50M

$50M to $100M

> $100M

85%

12%

3%

If family owned, how long has your

company been owned by the family?

1 Generation

2 Generations

3+ Generations

Retail,

Wholesale

trade or

distribution

Energy

Business/Professional

Services

Technolog

y/Comm…Transportation

Manufacturing

Healthcare

Real Estate

Insurance/Fina…

Other

What industry are you in?

15%

85%

Do you have an engaged Board of

Directors/Advisors?

Yes No

24%

44%

32%

Are you familiar with all of your transition

options?

Yes No Not sure

5%

88%

7%

Have you established a formal

transition advisory team?Yes No My Board

14%

86%

Have you completed any formal education

related to transitioning your business?

Yes No

22%

1%

3%

3%

12%

1%3%

50%

5%

What best describes how you are

planning on transitioning?

Internally (family

succession)Internally (ESOP)

Internally

(Management)Internally (Partners)

Externally (3rd

Party/Strat/PE)Externally (Recap)

Externally (Orderly

Liqu)Not sure

Other

Which describes your post transition

“life after the business” plan?

0.00% 10.00% 20.00% 30.00% 40.00% 50.00%

Written Plan

Informal plan

Idea

No thoughts

33%

67%

Do you have provisions in place if key personnel

or shareholders should get ill, die or otherwise

exit the company?

Yes No

Challenge #150% of exits are not voluntary

Death

Disability

Divorce

Distress

Disagreement