Businesses for Sale – A Boomer Tsunami
Aging baby boomers with businesses for sale in the next ten years will need to be prepared for a buyer’s market.
As one of the most entrepreneurial and innovative generations in U.S. history, this group is poised to make a significant impact as they retire; the oldest ones turned 65 in 2011. This has set in motion predictions of a selling tsunami–up to ten trillion dollars’ worth of businesses will change hands between now and 2015.
As this wave of wealth transfer ramps up, one big question looms—who will the baby boomers sell their businesses to?
One thing is for sure—most of them will not be selling to their children. While the boomers were building their careers they were not creating the large families their parents did.
In fact, a Trendsetter Barometer survey conducted by PriceWaterhouseCoopers found that only 18% of business owners were considering selling to a family member while a whopping 51% were planning on selling their company to another company.
With such a large supply of businesses on the market, there is most likely going to be a business inventory glut. This will create downward pressure on pricing and spur potential consolidation in some industry sectors, as existing businesses take advantage of the excess supply to grow by acquisition at favorable prices.
Stand Out In A Crowd
What is a baby boomer to do?
For the sake of a secure retirement, baby boomers should think seriously about what succession and liquidity look like for their businesses. And in order to meet these needs in a buyers’ market, a well thought out succession/exit strategy is key.
In order to position for the best possible opportunities sellers should:
- Know what their business is worth. Owners should seek professional, independent expertise to conduct an accurate business valuation report. Once the value of the business is known, decisions can be made with confidence and a future path can be chosen wisely.
- Strengthen and build value. Build operational value by leveraging strengths and evaluating weaknesses. Every major decision should be considered in terms of how its outcome will add value to the business’ exit plan.
- Develop an exit strategy. Leave nothing to chance by creating detailed plans because too much is at stake.
Are you a baby boomer thinking about retirement? Have you developed an exit strategy you feel comfortable with when it comes time to sell?
Want to learn more? Download Key Considerations for Building and Improving the Value of Your Business.