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

Money and lifestyle are key reasons for leaving

Timing is everything. Now is a good time to entertain offers.
– Male, 58
I don’t want to work forever, and what we’ve built will have value for others.
– Male, 51

...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.
– Male, 63
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.
– Male, 35