Chamber Amplified
Each week Doug Jenkins of the Findlay-Hancock County Chamber of Commerce talks to industry experts to help local businesses find new ideas, operate more efficiently, and adapt to ever-changing conditions.
Chamber Amplified
Best Of Chamber Amplified: Planning Your Business Exit Strategy
Originally aired May 24, 2024
As we wrap up the year, we’re revisiting a very important conversation we had on Chamber Amplified: business owner exit strategy and succession planning.
In this Best Of episode, Doug Jenkins is joined by Jason Harris of Equitable Advisors to talk about what business owners need to know before they retire, sell, or step away from their company - and why waiting too long can cost owners, employees, and the community far more than they realize.
With a massive wave of retirements on the horizon, this episode remains just as relevant today as when it first aired.
In this episode, we cover:
- Why two-thirds of small business owners plan to retire soon, but fewer than one-third have a plan
- The difference between a “lifestyle owner” and a “value creator”—and why it matters when selling
- Common pitfalls when business owners don’t plan ahead
- How succession planning protects not just owners, but employees and the local community
- Why many businesses fail to sell - and what owners can do now to avoid liquidation
- What buyers and investors should be doing today to prepare for upcoming ownership transitions
- How legacy, community involvement, and local ownership factor into exit planning decisions
Whether you’re a business owner thinking about retirement, a second-generation leader, or someone interested in acquiring a business in the future, this episode offers practical insight and timely perspective.
Guest:
Jason Harris
Equitable Advisors
🌐 https://jasonharrisfa.com
📞 419-531-7131
Why this episode still matters:
Business exits that aren’t planned often result in:
- Lost value for owners
- Disrupted livelihoods for employees
- Local businesses being sold outside the community
Planning ahead helps ensure continuity, stability, and long-term community impact.
Chamber Amplified is a podcast of the Findlay-Hancock County Chamber of Commerce, focused on issues impacting local businesses—from workforce and leadership to finance, succession, and long-term planning.
Have an idea for a future episode?
📧 Email Doug Jenkins: djenkins@findlayhancockchamber.com
Thanks for listening—and enjoy this Best Of episode of Chamber Amplified.
Music and sound effects obtained from https://www.zapsplat.com
Hi everybody, Doug Jenkins from the Findlay Hancock County Chamber of Commerce here. Hope you're enjoying the holidays. Hope you had a Merry Christmas and looking forward to New Year. We're running best of episodes for the next couple of weeks. Don't tune out yet. There's good information. Maybe you missed it. Maybe you need the refresher. We've got a lot of uh episodes coming up. I shouldn't say a lot of. We've got like three best of episodes coming up, and then we'll be back into the normal schedule. Today we're going all the way back to an episode we ran May 24th of 2024, talking about business owner exit strategy. This is a big topic of conversation. It was starting to bubble up on the radar when we were talking about it. Then it's something that continues to bubble up on the radar now. In fact, when we had the Ohio Chamber of Commerce in to talk with us a couple of weeks ago, one of the things they talked about is when business owners retire and they don't really have a plan. A lot of times they sell to interests that are outside of the community that don't contribute to the community, like we're accustomed to here in Findlay and Hancock County. So in this episode, we talked to Jason Harris of Equitable Advisors about the things that business owners need to do to plan ahead for that exit strategy to make sure one, they get the value out of the business that they want, and two, that that business continues to be connected to the community. Always enjoy talking to Jason on the podcast. I think you'll enjoy this episode as well. Coming up next on Chamber Amplified.
Jason Harris:You know, a lot of times when I'm talking to business owners about succession plan and exit planning, they talk about the responsibility they have to show up every day and be there and be part of the business. But I look at it as if you're a business owner, you also have the responsibility to take care of your business if you don't show up tomorrow.
Doug Jenkins:Welcome to the show. I'm Doug Jenkins from the Findlay Hancock County Chamber of Commerce. On each episode of Chamber Amplified, we're examining issues impacting the local business community, whether it's employee recruitment, retention, marketing, IT issues, it's really anything that has the potential to impact your business, both now or in the future. Our goal is to give our members tips each week on at least one way they can improve operations and thrive in the current business environment. So stop me if you've heard this one before. We're at a pivotal moment in the economy. I get it. It's a phrase that you've heard a million times. It's almost lost all meaning in an age where every news headline is ramped up to eleven. And I don't say that lightly either, as someone who used to work in the news. But hear me out on this one. This is a very specific example of a massive pivot that's on the horizon and that we need to pay attention to. Teamshares.com estimates that two-thirds of small business owners plan to retire in the next two years. That's a big number. What's also a big number is that less than a third of those people have a plan on how to retire and have that business transition in place. Well, it stands to reason that the majority of business owners are likely baby boomers or early Gen Xers, so they're ready to move on to that next phase of life. Today I'm joined by Jason Harris of Equitable Advisors to talk about what's going to be a giant shift in wealth and what current business owners need to do to make sure that they're ready to sell. And here's a quick preview. If you're the type of business owner who you're really the face of your company and you do everything, you may need to start rethinking that strategy. We're going to tell you why. I mean, I'm not going to tell you why right now. That's called a tease. You have to listen to the whole episode to find out. Thanks for tuning in. Remember, if you're listening on Apple Podcasts or Spotify, you could rate and review the show. It really does help spread the word. Now let's get into it. Let's just kind of go to the beginning of this process. Uh, when you are talking with a business owner and you know they're getting close to retiring, and maybe they've told you that they're getting closer to retiring. What are the things that they need to start considering? What's the checklist that they should be going down? And I guess when should they be starting that checklist?
unknown:Yeah.
Speaker:That's a mouthful.
Doug Jenkins:Good luck with all of those questions.
Speaker:It is, but I mean, you you just nailed them all right on the head there. I mean, there is a checklist. We have a quick 10-point checklist that says, Are you ready to retire? And some of those things on the checklist are do you have a succession plan in place? Meaning specifically around your business. And really, they we think of it as a three-legged stool. The first leg is your business, the second leg is kind of your personal finances, and then the third is kind of your exit planslash life after your business. And without that three-legged stool, the stool just doesn't sit, it doesn't work properly. So you got to kind of have all three components. So when we're going through that checklist, we like to say you should have a minimum of three years advanced planning, preferably 10 years. The ideal situation is you're you're planning your whole life, the whole time you own the business. Now, obviously, that's not the case for most because most are just trying to figure out how do I grow, how do I market, how do I manage the costs. Um, but no, everybody should be thinking about it three to five years minimum in advance to do it correctly. And but that's just not the case. And unfortunately, as some of the data you've seen, we are now approaching which is going to be one of the largest wealth and ownership transfers in history. We have over 10,000 people turning 65 a day for the next seven years. So there's going to be a lot of ownership change.
Doug Jenkins:What are the pitfalls for failing to plan for this? Let's say that uh the example we always use on the podcast is Doug's widgets, home of the finest widgets in Hancock County. Let's say that tomorrow I've just decided, you know what, time to retire. Uh, and that I don't have that plan in place. What am I gonna run into?
Speaker:So you're gonna run into a few things. If if you're the sole owner, you're gonna run into some estate issues. If you're married, you have children, maybe they're involved in the business, maybe they're not. Chances are, unless your wife is already working at the company, she probably doesn't want to be taking over as CEO of Doug Swidgets, right? Right. So you're gonna run in some leadership challenges, you're gonna run into some ownership challenges, some estate uh issues. If you're the breadwinner in this situation, you're the sole earner, a lot of times that can displace the family in an income perspective. If your spouse does not work and they're solely reliant on your income, what happens if that's gone tomorrow? You know, a lot of times when I'm talking to business owners about succession plan and exit planning, they talk about the responsibility they have to show up every day and be there and be part of the business. But I look at it as if you're a business owner, you also have the responsibility to take care of your business if you don't show up tomorrow. What happens if you don't come in tomorrow? What happens to the operation? What happens to leadership? What happens to your finances, both the business and personal? So the more they can do on a preparation standpoint for both the business and their personal life, the better off the business and their family will be.
Doug Jenkins:Not just the business and the family, too, but uh let's say you've got several employees, they're counting on you to have a good succession plan in place. They want to keep working there and they want to know the doors are going to be open the next day. Uh so there's there's that aspect of it too. And I think that the I don't want to overlook that because I think that can be a significant issue and have a wider ripple effect in the community if it's not done properly.
Speaker:Yeah, yeah, I agree. And and there's two types of owners, and I think this is perfect time to talk about it. So one is the lifestyle owner, that is the owner that lives and breathes the business. They are they work 24-7, they can't take a day off. The the leadership is solely dependent on them. The the usually typically the relationship with the clients is with the owner, the relationship with the vendors is with the owner, they tend to have weak leadership because the owner is so involved and almost uh overbearing. They also tend to have weak plans and culture because their owner is so involved in it. Those are the hardest businesses to transition and sell. Because if you remove the owner and I'm saying a third party or I'm an outside investor, I want to buy the Doug's widgets. If I remove Doug, what exactly am I buying? I have no guarantees. All the customers and vendors could leave tomorrow. About 70 to 80 percent of those businesses will not sell because of that lifestyle owner. The next is what we call a value creator. That's the guy that could fall off the planet tomorrow, come back in two months, and his business didn't skip a beat. They have strong leadership, strong culture, processes and procedures in place. The the the relationship with the customer and the vendors is with the business. It does not mean the owner's not involved. It doesn't mean the owner doesn't know those people or have some relationship. It just means if the owner is removed, they'll still maintain that. Those are the ones you get top dollar for, those are the ones typically getting phone calls because they're best in industry, best in class. And those are the ones that are looking to get acquired.
Doug Jenkins:That's interesting. How do you transfer some or have someone transition from being that lifestyle owner into the latter category? Because I think it's real hard for someone in that lifestyle ownership model to be like, well, I look, I built this company from the ground up. I can't remove myself from it, it's just out of their nature. But then when you start to talk about the dollars and cents and say there might not be a sale there for you in the end, maybe that gets the people listening.
Speaker:That's exactly right. It's almost like, you know, it's almost like something like a lifestyle situation has to happen. And we always talk about when we, you know, being a certified exit planner, one of the things we always talk about is the five D's. They are divorce, death, distress, disagreement, and then um typically you know, disability, something may happen, but one of those five things typically happens to owner. And most of the time it's that distress or that disagreement. If you're in a partnership, uh there can be something come up down the road that you end up having a fallout. The partners want out, one of the partners wants out or wants to sell. But how you get a lifestyle owner to transition to that value creator is typically something has happened. They either want to sell the business, they need to sell the business, or they're just burnt out to the point they want out. And then it usually comes, we have to move them to that value creator, uh, owner through having that conversation when we actually get a business valuation done and they see that it's not worth what they think it's worth, then we have to usually spend the next two to three years putting them in that position where we bring on new people to kind of take over and learn as that owner transitions.
Doug Jenkins:And that feels like a hard conversation to have in the moment, especially if you've dealt with one of the five D's there. It's probably just better to have that plan in place already. That way, when things like that do happen, you're already covered.
Speaker:Yeah, exactly. And we always look at exit planning, excess succession planning as any any as just your normal pro stops of procedure, right? Your normal policies that you would have to your day-to-day. It doesn't mean you have to exit or transition immediately. It just means when that time comes, that decision will be so much easier because you already know what that's going to look like, who who the potential parties involved are going to be. You've already thought about what is life gonna be like after my business, because we've already started to put some of that in place and we start and envision it. A lot of times, why business owners tend to struggle to walk away or to sell, and they end up being in that 70 to 80 percent that don't sell, end up getting liquidated, is because they just never took the time to think about life after their business and actually plan for it. They kind of just uh in fact, I got a call a couple weeks ago from an estate planning attorney who's like, hey, I have a business owner, they're looking to exit. I'm like, great, when are they looking to exit next month? Okay, well, that that's does it doesn't it doesn't usually work well that way. That's where we have to have those tough conversations, or if they really need to get out, then they end up having to settle for much less than what they want, or you know, it ends up just being a liquidation uh situation.
Doug Jenkins:So those are the things to consider on your business owner side, but like you said at the beginning of this, this can possibly this is going to lead to one of the biggest wealth transfers in history as these businesses sell. Uh, if you are someone who's looking at investing or buying a business, what should you be doing now to prepare for that?
Speaker:If you're looking to take over a business, yeah. Yeah, if you're looking to buy one, you you need to first identify what what industry do you want to be in? It can either be something that is going to be active, something that's gonna be passive, maybe you're just gonna be an investor in it, somebody else is gonna run it. You really have to start identifying your criteria. You also have to start thinking about is this going to be my main source of income, my secondary source of income, something I may want to do in retirement. There's a lot of franchises and things out there that you can buy and own now. Don't not even be involved with the day-to-day, but eventually take over as a second career or second job. So you really need to start identifying what makes you happy, what inspires you, maybe what what is your passion? What would you really want to do? Say if you're not in love with what you're doing today, what would that next career look like, or what would your passion really want to be if you could walk away tomorrow? And then maybe that's something you want to get invested in.
Doug Jenkins:When you talk to people who are planning to sell their business, how often does their business's legacy in the community come up? Because I think one thing that we we've started to see, and I think this is a nationwide thing that we're seeing, is that locally owned businesses and operated businesses are being sold, but they'll get sold to a national or regional conglomerate and they lose that connection with the community after that happens. Are there discussions about that in the in the process?
Speaker:Oh, absolutely. We always uh mention in community charitable givings. A lot of times when you're talking about estate planning, if their estate is rather large, a lot of times they will be involved in the community as well as some maybe some charities or organizations that they want to donate some portion of their income or estate to at some point. Some of that could come from the business. So absolutely, that's a big topic. And it's also it's it's come up in situations where they want to know if they're if it's not going to be a family-owned business where it's being passed on, what is that next owner's going to be their involvement in the community? Because that may be a part, if they're part of the local chamber, they want to make sure that that that next owner has that kind of community focus.
Doug Jenkins:How big of a discussion is this in your industry right now?
Speaker:It's really big. Because some of the stats we talked about in the beginning, right? That just that how big this this ownership transfer is going to be. And because most owners have maybe 80 plus percent of their wealth is tied up into the business, how are they gonna extract that? The only way to do that is by selling their business or transitioning their business. So it's one of two things is gonna happen. Either they're going to end up selling for maybe an amount that they're not wanting to sell for or not prepared to sell for, or they're gonna end up having to work longer if they're not properly succession planning and exit planning.
Doug Jenkins:So if people would like to learn more about this subject, or maybe they'd like to talk to you about it, what's the best way to go about doing that?
Speaker:Uh, two ways they can reach me. One is uh either via my website, which is jasonharrisfa.com, or they can just uh contact me at my office, 419-531-7131.
Doug Jenkins:All right. Jason, we appreciate your time on the podcast today.
Speaker:Yeah, thanks, Doug. Appreciate the time as well.
Doug Jenkins:Big thanks to Jason for joining us once again. Now, he's going to be one of several speakers that we have on this topic at the November Fresh Brew Business here in Findlay. Certainly it's a big topic of conversation. We're going to have more discussion about it in the future, both here on the podcast and through other Chamber of Commerce programming. In fact, I talked to Pat Sadowski from Eastman and Smith about this topic and some other aspects of it several episodes ago. Might have even been a couple of years ago at this point. I'll put a link to that previous episode in today's show notes if you want to listen to that. Chamber Amplified is a free podcast for the community thanks to the investment of members from the Finlay-Hencock County Chamber of Commerce. Because of our robust membership, we're able to focus on providing timely information to the Finlay and Hancock County business community, run leadership programs for adults and teenagers, and be an advocate for the area while also providing tools to help local businesses succeed. That sounds like something you'd like to be a part of or supporting, just let me know and we can talk about how an investment in the chamber not only helps strengthen your business, but strengthens the community as a whole. That'll do it for this week's episode. If you have ideas for topics we should cover in the future, just send me an email, d Jenkins at Findlay Hancock Chamber.com. Thanks again for listening. We'll see you next time on Chamber Amplified from the Finlay Hancock County Chamber of Commerce.
