Entrepreneurship Section two
In a strong economy, some business owners see an opportunity to cash out
Forty-one percent of business owners expect to exit their business in the next five years. Many are at or approaching traditional retirement age and feel ready to start a new chapter. Other business owners believe current economic conditions will boost their chances of selling at a favorable price.
Among business owners who plan to exit, about half intend to sell, while 20% want to leave the business to family.
Selling the business is the preferred exit strategy
Selling the business is the preferred exit strategy
Money and lifestyle are key reasons for leaving
Timing is everything. Now is a good time to entertain offers.
I don’t want to work forever, and what we’ve built will have value for others.
...but many have neglected key steps to prepare for a sale
...but many have neglected key steps to prepare for a sale
Business owners may be underestimating what’s required for a successful sale. In fact, 75% of owners planning to sell believe they could do so in a year or less.
However, 58% of business owners have never had their business appraised, and 48% have no formal exit strategy in place. Most expect a competitor to buy their firm, ahead of employees, large companies or private equity firms.
Business owners look to competitors as buyers
Many business owners are unprepared for a sale
To prepare for selling the company, the balance sheet needs to be in good shape. The business needs to be showing profitability. I need to have a clear idea of what the business is worth, and the terms I’m willing to agree to.
I need an outside individual or firm to develop a fair value of the company plus outline logical steps to sell the business. Doing things the right way will maximize
the sale of the business and minimize tax liabilities.
