Recent reports have suggested that increasing numbers of baby boomers are selling their businesses and embracing retirement. Many of these sellers have spent decades maintaining and growing their businesses but are faced with the question of what to do with it when it's time to consider retirement. Selling a business requires a good plan and baby boomers, like any business owner, can benefit from the following selling tips.
Baby Boomers Contemplate Retirement
According to a recent article published on Newsday.com, "A national survey of 951 business owners, released in November by Pepperdine University's business school in Los Angeles, found 38 percent expect to retire within the next five years, 67 percent within 10 years and 81 percent within 15 years." Of course, it should not come as a surprise; this hard-working generation would like to enjoy the fruits of its labor. Yet many baby boomers are still uncertain about what to do with their business as they edge closer to retirement.
Of course, baby boomers aren't the only ones to consider getting out of the business of running their own business. Everyone who is considering selling their business can benefit from a well-crafted plan, various tips, and even a consultant that can help the seller garner the highest price when selling their business. Whatever your age and whatever your reasons for selling, it's important to consider every angle when selling a business so you can ensure you get the best possible deal.
Contact a Business Broker
Both business buyers and sellers find that working with a business broker is one of the most reliable ways to secure a successful transaction. Business brokers help sellers assess their business and its assets thoroughly so they can value it at a marketable rate. Moreover, business brokers also have the ability to tap into their network of interested buyers, which can enable to the seller to sell their business quickly and at a competitive price. Business brokers are experts and provide the advice business sellers need to navigate the sale process with success.
Don't Wait Until the Last Minute
It's important for business owners to investigate options for selling their business long before they intend to. Many business owners may hope to keep the business in the family or find someone they know and can groom to take over the business. Of course, these scenarios aren't often possible. Moreover, selling the business can be a lucrative prospect that can bolster retirement funds. It's important to consider a plan for selling the business between two to ten years before you hope to retire.
Value Your Business
Many owners find it difficult to place a value on their business. This is where a good broker comes in that can help you assess the market worth of your operation and can help you determine a fair asking price. It can take time to assess all the aspects of your business, but your broker has experience valuing businesses day in and day out. For example, in a recent blog post by Sunbelt Bay Area, a California based broker group, a situation was detailed where a client approached them for a second opinion on the valuation of his business: “A potential seller called Sunbelt wanting us to do a Broker Opinion of Value. He had paid to have a formal valuation done and thought it might be a bit overpriced. He was right. The valuation company used a Discount Cash Flow method. Normally this method is used with larger companies with a long consistent history of earning and the least reliable method used.” In this case, the brokers were able to save the business owner from wasting time listing his company at a non-competitive price.
Selling a business is a big step so it's important to consider this move carefully. By taking your time and working with a business broker, you can achieve a successful sale that truly complements your years in business and paves the way for a wonderful retirement.