The 2024 National Exit Planners Survey – Introduction and Overview

Approximately 51% of the six million private employers in the United states are owned by persons 59 years old or older, with a mean age of 67. These Baby Boomers disrupted education, the workplace and social mores as they passed through the stages of life. They were more numerous, more educated and had higher expectations than any previous generation. Squeezed out of the traditional career ladder, they became entrepreneurs at over twice the historical rate.

These owners are now transitioning into retirement or, as has become a popular concept, their “second act” of life. Many of the businesses they’ve run for the last 30 to 40 years have become substantial enterprises, and their transfer is much more complex than that of a stereotypical “corner store.”

Surveying Professionals

Other organizations survey the business owner community regularly. These surveys indicate that younger business owners, especially Generation X (43 to 59 years old), are adopting plans for the transfer of their businesses at a much earlier age than the Baby Boomers. This trend is accelerating the growth of exit planning as an important addition to the skill set of a number of professional disciplines.

Unlike any other advisory specialty, comprehensive exit planning and implementation is nearly impossible to accomplish by a single practitioner alone. The financial, tax, risk management, legal and operational skills involved require a team of cooperating professionals. That is why we began the National Exit Planners Survey (NEPS) in 2021. In our dual roles as both advisors to business owners and vendors of planning tools to other advisors, we found little information regarding the marketing and billing practices of other professionals.

We think that having this information, and sharing it with the industry, will help all of us develop better approaches to assisting our clients.

Unique Characteristics

The NEPS is the only survey in the industry that cross-references responses. That means we report more than ordinal data (i.e. This many answered “yes.”). We compare the responses by profession, certification and experience in the field. While laborious, we think this approach provides the user with more useful information.

Changing Demographics

As we announced with the release of the 2022 NEPS (Industry Activities 2021), the data we gather on advisor and practice demographics changes slowly. For that reason, in 2023 (Industry Activities 2022) we conducted an abbreviated survey focused on engagement trends; specifically marketing, practice concentration and fees. That proved to be interesting, but not particularly revealing.

This year, we compared 2024 NEPS (Industry Activities 2023) to the 2022 NEPS (Industry Activities 2021) because the data and questions are comparable. However, as we performed our analysis we discovered another issue.

The tremendous number of CEPAs being conferred by the Exit Planning Institute are quickly skewing all the results. By sheer numbers, they threaten to make the whole industry appear to be largely populated by financial planners who do not charge for their services. We welcome these professionals, and recognize their value both in educating business owners on the need for exit planning and as referral sources for implementing practitioners. However, they are rapidly creating a two-tiered class of advisors, those who discuss exit planning and adjunct to their main work, and those who engage in comprehensive planning as a separate revenue source.

Accordingly, we will be modifying our odd numbered year surveys to focus more on the fees and clients of those who practice the more comprehensive approach.

Thank you to all of our participants.

Why Now?

The first Baby Boomers were born three-quarters of a century ago. The youngest are now 55 years old. Much has been written about them, both favorable and unfavorable. It is impossible to argue, however, that they were the most impactful generation of any alive today. That has little to do with their attitudes or their accomplishments. It’s all about the numbers.

Put simply, the Baby Boomers added to American workers and consumers in disproportionate numbers. In a mere twenty years, Boomers added 56% to the population of the United States. If that wasn’t enough, they embraced the two-income households, dramatically increasing the size of the workforce. From the mid-1970s to the mid-1980s the population increased by 11%, but the workforce grew by 29% with over 1,000,000 women added each year. The mere presence of the Boomers fueled a forty-year expansion of the economy.

They overwhelmed school systems (double sessions in K through 12,) higher education (457 new U.S. colleges were chartered in the 1960s) and franchising (from 1975 to 1980 new franchise sales rose from 2,000 to 22,000 annually). Most importantly (at least to the focus of this report), Boomers became entrepreneurs. Between 1976, when the first Boomers turned 30, to 1988, the number of annual new business formations in the U.S. rose from 350,000 to 550,000.

These are the businesses that are being transferred today. According to the Small Business Administration, there are roughly 6,000,000 businesses with between 5 and 500 employees in the United States. In the last ten years the percentage owned by Baby Boomers has dropped from about 2/3 to around 50%. That means there are still 3,000,000 companies to be transferred or sold. Assuming an even distribution over the next 15 years (when the youngest Boomer will be 70 years old), that means an average of 200,000 business owners a year, 16,666 a month, or over 800 a day are looking for their way out.

That is why exit planning has become so much more popular in the last five years. Once again, the Baby Boomers are blazing new paths through the business landscape.