Many business owners that are of the baby boomer age have now lived through about 3 or 4 recessions, depending on their industry. In my discussions with some of these entrepreneurs they have clearly indicated that they would love to sell up over the next 3-5 years. Many business owners feel that their business is not giving them the pleasure it once had and would love to walk away (with enough money) if they could..
This is an interesting statistic as it indicates that there could be a flood of businesses for sale with no potential buyers for these businesses in the near future. Why do I say this? Well, many of these smaller businesses that do ok for their current owners may not be up to modern business systems and practices. What I mean by that is that the potential buyer will be looking at businesses that have proper business systems set up as well as the potential for growth.
In the area of business systems it would be important for buyers to know how things are done in a business and that these aspects are documented. For example, how are purchases of products ordered, received, distributed, etc. Another example may be what marketing system has been set up and how effective is it? Any potential purchaser of a business wants to know that the systems work and that they are efficient. New buyers want to spend more time generating new business than fixing or installing systems into a business.
No purchaser of an existing business would want to buy a business that has no upside potential. It is therefore important to identify markets that can potentially be tapped for future prospecting. If these markets can be easily identified then there is potential upside for the aspiring new owner and a potential increase in the selling price of the business for the owner.
To get around these issues it is important that business owners plan for their succession now and not once they have decided that it is time to change their focus. I have an on-line questionnaire that can help business owners understand the issues surrounding their business and help them identify them so that they are ready to sell at the right price. Contact me now to find out more.