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
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
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.