As America ages, there is a growing trend among businesses nationwide.
Experts forecast that millions of Baby Boomers will close or sell their business in the next decade. Every day for 18 years, 8,000 Baby Boomers will turn 65, and 70 percent of businesses are owned by people 55 and older. A recent survey of small businesses in the United States showed that 72 percent of small business owners don’t have an exit plan, and 54 percent intend to retire in 10 years.
There is a succession crisis in our country, which emphasizes the importance of being prepared if you are reaching a point where you want to sell your business.
“All of those aforementioned numbers illustrate that the market will be competitive,” Chadwick explains. “If you’re a business owner who is planning to sell in the next eight years, it is important to develop a strategy to get your company in a competitive position for a sale.”
Buying a business from a Baby Boomer can represent an exceptional opportunity for a motivated entrepreneur. Many of these businesses are turnkey with equipment, the building, the name and the licenses among other features. These long-standing companies also often have no debt or limited debt, a loyal customer base, name recognition, and tested and proven business models.
Sunbelt Business Advisors of Southwest Ohio offers these tips for business owners who are thinking about selling:
- Establish a sense of urgency and a real view of your business today. Look at it from a buyer’s perspective. Remember, value for the buyer is based on what he can get, not what you put into it.
- Develop a road map now to increase value. That can happen without significant growth, dramatic improvement in earnings or increasing debt.
- Create priorities for how you focus your efforts over the next two to three years. You’ve spent a lifetime in the business. Now it’s time to start work on your business.
- Find help from experts. Issues are complex and vast. Working with someone with a portfolio of clients with successful transactions is beneficial.
Sunbelt provides guidance for the purchase or sale of a business in Southwest Ohio. The firm’s expertise covers the entire process of ownership transfer.
“We’re familiar with the fine details that are necessary for a successful business sale, so we can make sure that you don’t miss an important element to a smooth transition,” Chadwick says.
Sunbelt’s portfolio of clients is diverse. In recent months, they have coordinated the multi-million sales of Tool Tech, a tool and die shop in Springfield, and Toolnite Manufacturing in Harrison Township, as examples. 311 Drafthouse in Piqua, Meadowview Growers in New Carlisle, Donna’s Cookies in Cincinnati and Flowerama in Kettering are other sales that showcase the variety of clients Sunbelt represents.
Sunbelt’s proven methodology to manage the process of selling their clients’ businesses include elements like:
Developing an Exit Strategy Plan, which involves Advisory Services, which entails assembling a team of professionals such as wealth managers, estate planners, tax specialists, attorneys and the Sunbelt M&A specialist to understand the owner’s goals and objectives for transactions. Performing a “Transaction Readiness Assessment”, Value Driver Analysis, Business Valuation and Asset Appraisals, and a Value Gap Assessment are integral parts of this process, too.
Implementing a Business Transformation Process, which is focused on closing any value gaps to increase value, marketability and transition readiness.
Spearheading the Transaction Process, which involves complete support for executing the sale of the business, including the Confidential Business Review/Offering Memorandum, target development, confidential marketing, buyer screening, negotiation of price and terms, facilitating the due diligence process, coordination with the exit team, and managing the transaction closing process.
“Deciding to sell your business is one of the most important and challenging decisions you will make as an entrepreneur because it represents the end of one era and the beginning of a new chapter,” Chadwick says. “It is a complex process, and our expertise and guidance provide peace of mind and helps ensure that you are prepared and feel good about the transaction in every stage.”