Sometimes just listing out the statistics of an issue or issues helps put a difficult decision into better perspective. Owners often do not understand that they can have a profitable business without the structure that buyers often require. And if you do not have what buyers want then you do not have a business to sell.
Exit planning is the process to determine if your business has the right structure. If it is determined there are flaws in the structure exit planning identifies how to change the structure to make it more salable. The goal is to make it look like what buyers want to see and increase the probabilities of closing the transaction (see below stats for why this is important).
Approximately 76% of owners plan to transition over the next 10 years (representing approx. 4.5 million businesses)
49% have no transition plan
More than 70% of businesses that are put on the market do not sell
In fact, according to a recent survey by Citizens Commercial Bank of more than 450 middle market business owners and decision makers, supplemented by a series of in-depth interviews, “nearly 70 percent of business owners say their expected retirement date will significantly impact when they decide to sell their company.”
71% of small and mid-sized enterprise owners plan to exit their businesses within the next ten years, strongly highlighting the growing importance of enhancing business value. However, the challenge is that few organizations genuinely understand what actions they must take to achieve this goal...."– Deloitte & Touche –
Over 70% of 12,000,000 Baby Boomers' businesses are likely to change hands over the next 5-12 years
With Millennials (currently ages 16-34) being the next big working population the gap in experience presents a difficulty in transition from Baby Boomers to Millennials.
Call John Hamel at 720-519-6073 if you would like to discuss this blog.
John Hamel is the Managing Member of Austec Business Transitions, LLC. helping businesses optimize value relative to exiting their company.