The answer to that question is, “It depends!” There are all sorts of studies and surveys suggesting that as more and more “Baby Boomers” reach retirement age, the market will be flooded with companies for sale. The consensus is that with these privately-held company owners reaching and nearing retirement age, the time to sell is now.
In one survey, 57 percent of business owners said their age was the motivating factor for exiting their business. In another one, 75 percent of owners with revenues between $1 million and $150 million stated they looked to sell within the next three years. Reading all of this information, one gets the feeling that over the next few years almost every privately-held business will be on the market.
Time for a change
While there are always going to be those who feel Armageddon is coming, or that all of these companies are going to be on the market on the day Baby Boomer owners hit 65, there are some compelling reasons to sell your business now – and some reasons that may compel you to hold off. One good reason for any owner to sell “now” is that it just may be time to “smell the roses,” as they say.
After running the business for many years, “burn-out” is a valid reason for selling. Many business owners may have, without realizing it, let their business slide a bit. You lose a customer or client here and there and don’t make the effort to replace them. Or, you don’t make the effort to check back with the supplier who has promised to give you a better price on an important product or service. It’s too easy to stick with the one you have been dealing with for years, even though you know the price is probably too high.
Many business owners want to sell their business to fund their dream retirement, but don’t know where to start.
I’ve used these 5 Critical Questions to help my clients prepare and start increasing their business value.
On the flip side, it is also easy to convince yourself business is down a bit this year – maybe due to the current economy or recent pandemic – likely reducing the value of the company. Maybe waiting until things pick up a bit and values increase would be a good idea.
In one survey, 35% of business owners said they were going to hold off selling because they felt their business would continue to grow and therefore, they hoped, also increase in value. Unfortunately, no one can predict the future. New competitors may enter your market. Foreign competition may move in. You may not have the energy or that “fire-in-the-belly” you once had, so the business may slide even further.
There is an old saying that the time to plan your exit strategy is the day you start running the business. Business owners can’t outgrow interest rates, global health crises, or aging. The time to sell is when you are ready to sell. The mere fact that you have read this far may be a sign that now is the time to sell.
To learn more about current market trends, what your business might sell for, and what your next step might be, reach out to me. I would be happy to offer insight. You can call me direct at 506 872 2900, send me an email, or CLICK HERE to book a FREE 30-minute appointment to discuss anything you’d like more information about.