George & Company has been helping owners sell their businesses for over 30 years, and in that time we’ve seen every kind of buyer and seller. A growing trend in recent years has been baby boomer retirees who are looking to sell off their business to fund retirement. Many of these business owners are referred to use because of their need to learn their business’s worth before starting the selling process. From our own experience, backed up by surveys from M&A Today and Rasmussen Group surveys, we shed light on the stall of business owner retirement.
According to a survey from the publication M&A Today, 85% of all business owners have no exit strategy—that is that they have no plan on how to pull their invested money and profits out of their business if they were to leave, vital when the average business owner has up to 75% of his net worth tied up in his business. This is due largely to 65% of all business owners not knowing the worth of their company: how can you plan out your retirement when you don’t know how much you can place towards it? This in turn leads to owners who never retire: as much as 42% of all small business owners have no plans in place for retiring, according to the survey of business owners conducted by the Rasmussen Group.
Traditionally businesses were family businesses, passed down from generation to generation. With the rise of modern transportation and education, fewer and fewer children follow in their parent’s footsteps—parents who are glad to provide those wider options for their children. As such, when it comes to exiting a business, the owners has to sell it. Some liquidate the company: in the Rasmussen survey 22% of owners said they planned to close their business upon retirement. But for many their love of their clients and their business’s reputation means finding the business a new owner and themselves a better retirement.
As business brokers and M&A specialists, one of our most requested services is business valuations for both buyers and sellers. For our sellers this provides an accurate accounting of their assets, both physical and intangible, and the worth of their company to potential buyers as return on investment. This, combined with the new market of millennials less interested on startups than existing businesses – which we talked about in our article The Perfect Time for Baby Boomer to Sell to Young Entrepreneurs – means that the only way to reach these markets is to learn your value.
Want to learn more about this trend? Contact George & Company, one of New England premier business brokers. We can tell you about the many business owners we’ve helped pass on their business and retire, as well as the new businesses owners we’ve helped find the perfect business for. From turnkey restaurants to manufacturing or at-home business, we’ve got listings full of businesses for under $1 million.