University of Minnesota Extension Specialist Michael Darger focuses on community economics and business succession. His background with economic development agencies led him to focus on business retention and expansion work, which eventually landed him at the U of M conducting and publishing important research on entrepreneurs and their exit plans.
Michael and his team recently conducted some research on Minnesota companies with 5 to 500 employees, specifically on business transition preparedness. They received 300 responses, reaching a milestone of “statistical significance.” The survey asked the owners questions about their awareness, attitudes, aspirations and steps they’ve taken toward an eventual transition from their business.
“Some of the findings were surprising,” said Michael. The most surprising was that a majority of respondents were unaware of what their selling options to employees might be. This directly correlates with whether they’ve had the proper advice on what their exit options are. A large number of owners stated that the business would transfer internally to family members; however, many admitted that their would-be successors weren’t ready or interested.
When owners were asked in general how they’d rank themselves on their personal preparedness, they scored an average of 3.6 out of a possible high score of 6. Some said they were ready personally (owner readiness, as we call it) and some said their business readiness was dialed in.
The responses can be explored in greater detail, to learn industry trends, and company size. Find the research and download the data here.
Listen to my interview with Michael here or search “Poised for Exit” on Spotify and Apple Podcasts.