Survey Reveals Business Owners Lack Formal Exit Strategies: UBS Investor Watch Report

Business owners are facing a major challenge when it comes to planning their exit strategy, according to the latest UBS Q1 Investor Watch Report. The report reveals that nearly half of business owners do not have a formal exit strategy in place, leaving them vulnerable to making uninformed decisions when the time comes to leave their company.

The survey, which is in its 22nd edition, highlights the lack of understanding among business owners when it comes to selling their business. A staggering 75 percent of owners believe they can sell their business in a year or less, despite not having a full understanding of the process. Additionally, 58 percent of owners have never had their business formally appraised, further complicating the selling process.

Stewart Kesmodel, Head of Global Family Office, Americas for UBS Global Wealth Management, emphasized the importance of proper planning when it comes to selling a business. He stated, “Selling a business successfully requires a great deal of planning, which owners often underestimate. Before pursuing a sale, it is important for business owners to not only have a view on the value of their business to potential buyers, but also an understanding of how that price applies to their personal needs post-transaction.”

The survey also sheds light on the preferences of business owners when it comes to their exit strategy. Selling the business is the preferred strategy for 52 percent of respondents, with 41 percent planning to do so within five years. However, the survey also reveals that the majority of heirs would prefer to receive the money from the sale of the business rather than inherit the business itself.

Overall, the key takeaway from the UBS survey is the importance of planning early and considering different exit strategies. By doing so, business owners can ensure they are making informed decisions that will benefit both themselves and their heirs in the long run.