BUSINESS OWNERS MOVING TO RETIREMENT

Many thousands of small and medium businesses are expected on the market in the next ten years as the Baby Boomer and Builder generations prepare their businesses for sale.

 

Survey of Business Owners
The result of a recent survey indicated Seventy-Five percent of business owners surveyed intend to sell their business over the next ten years.

 

Applying these statistics to the current number of businesses in this sector across Australia (those with between 3 and 200 employees) expect to see in excess of 300,000 businesses on the market within this ten year period.

 

The Pool of Buyers
With the volume of businesses on the market, vendors are expected to outweigh purchasers.

 

Demographics play a major role. A trade sale is the most popular exit option with many business owners believing their business will be bought by a competitor. However, with 77% of business owners aged 51 and above, there’s a likelihood that these competitors are also seeking an exit.

 

This begs the question; where are the purchasers? In the current financing environment, banks and other lenders require substantial collateral to secure a loan. This is a luxury that many in the younger generations do not have.

 

The end result is expected to be downward pressure on price; unwelcome news for business owners who have worked in their business since inception.

 

Prepare your Business for Sale
Business owners’ often only seek advice when they are actually ready to sell. While it’s possible to prepare the business for sale quickly, it can often lead to a band-aid approach to issues rather than a structured process that adds value and makes the business an attractive investment.

 

If you’re looking to exit your business, it’s critical that you plan early and obtain comprehensive advice. In doing so, you’ll be better able to position the business to attract buyers and gain maximum value.

Comments are closed.

Post Navigation

Newsletter Archives

car expenses motor vehicle expenses small business Small Business - March newsletter vehicle expenses