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According to a recent Forbes article, assets totaling over $10 trillion in boomer-owned businesses will pass from their owner’s hands onto the open market or younger family members by 2025.
If you’re a boomer business owner, you’ve probably thought about retirement and selling your business to help make that retirement a possibility. It’s important to have an Exit Strategy together and to be prepared to sell competitively, before you reach a situation that requires you sell at an inopportune time.
1. Commitment: Are You Ready to Retire?
The first question you should ask yourself is: Are you ready to sell your business? It’s important to the process that you’re committed to selling your business, and this isn’t just a bad day or impulsive choice. It’s important to make this decision at the start so you can plan around it. This will include some not-minor changes to your company, including your role in it. On a side note: have you decided on which chair you’ll be sitting in when we sell yours? Many of our sellers start having sellers remorse when they realize the chair they’ve been sitting in for years is going to have a new butt in it. Where will your new seat be? On the boat in the lake fishing? The golf cart at the course? On the patio? In the den? It’s important to think about in advance.
2. Planning: Getting Your Business Ready to Sellll
Once you’re committed, it’s time to make an exit plan. This is more than just a way of you finding a way out. It’s about getting the training, procedures, and due diligence in place so your business is marketable, even without you still in the picture. This plan isn’t just about you getting out, but someone else getting in to your place. The easier you can make this transition, as well lowering the bar on training and work needed to fill your position, the better.
3. Marketing: Get a Team to Sell Your Business
Once you’ve started to get your business ready for sale on the open market, it’s time to bring in the team to help you get together the information, knowledge, and skills needed to make the sale happen and avoid legal and financial pitfalls along the way. Here are the team members you’ll need.
Financial and Valuation Advisors
Just like you’d use a real estate agent to sell a home, you’ll need to get business brokers who are knowledgeable about the current business market and have experience on selling businesses like yours. One large part of this process is to get the value of your company through a business valuation. Companies like George & Co provide both valuations and business brokerages under one roof.
Banking and Escrow Agent
While it might sound odd to bring a bank in on your side when trying to find someone to buy your business, having access to favorable loans and accounts can be a large boon during any business deal. Providing loan options for a buyer (through a bank or your own business with seller financing) can help buyers reach the price you want to sell at. Using an escrow service keeps the money safe for both sides.
Legal and Liability Council
With any sale of a business comes a boatload of contracts, clauses, and confidentiality all riding along the line with a large amount of money. Making sure to understand and double-check the legal side of these deals is vital. These deals (both during and after) also hold a large amount of liability that can (and should) be covered by insurance on both sides.
By bringing this team together with your exit plan, you’ll be going from a day-dream to a marketable company. Are you ready to get started and sell your boomer business? Contact the business brokers of George & Company, experts for more than 36 years of selling New England businesses. We can help you plan your exit, bring your team together, and find the market and the buyer for your new business.