PR Newswire: “Business Owners’ Love Of Work May Hinder Succession Planning”
This article explains the parallels between the number of business owners with no plans to retire and the lack of succession planning. According to a recent poll, over 70% of business owners said they are not planning to retire, do not plan to retire for at least 11 years, or don’t know when they will retire. The survey also reported that 2 out of 3 business owners do not have a succession plan. Many of the business owners surveyed did not have a clear understanding of the importance of a succession plan.
Business owners should have a succession plan in place to protect the business, partners, employees and customers. If something were to happen to the business owner, a succession plan would help make sure everything goes smooth with the transition of the business.
Business owners can take these 5 simple steps to get started with an exit plan:
- Determine the value of your business
- Set goals & objectives
- Develop a plan and documentation with an advisor, attorney and accountant
- Consider options for the business in the case of disability, retirement or death
- Fund the plan
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Forbes: “Baby Boomers Are Selling Their Businesses To Millennial Entrepreneurs, and It’s A Brilliant Idea”
This article highlights the fact that many baby boomers will soon be looking to sell their businesses. This creates excellent business opportunities for millennials. Many of these businesses are well established, with no debt, loyal customers and proven business models. This makes them a great opportunity for young entrepreneurs to take over.
Here are some places to start looking for these businesses:
- Local CPAs
- Local chamber of commerce
- Local community bankers
- Local real estate brokers
- Business brokers
- Go directly to the business owner
Staying connected with local professionals in your area will help you to find a great business opportunity.
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Divestopedia: “What Is Your Company Actually Worth?”
This article explores how business owners misjudge their company’s value and how buyers and sellers often perceive a company’s worth differently. Most owners have difficulty staying objective when it comes to their business. To a buyer, the company is an asset to acquire at the lowest possible price. This often leads to a large difference in perception between a buyer and seller.
An experienced advisor can help negate these problems and make the sale process better for the owner. Here are some reasons why:
- The business owner can focus on factors of the business. This will increase the valuation such as EBITDA, gross profit margins, sales, and customer growth.
- The owner will get an extensive look at the financial health of their business from an advisor along with recommendations for improvement.
- An advisor will also be an experienced negotiator, helping the owner get the best sale price for the business.
To avoid mistakes in selling a business, get an accurate valuation of the business. Make sure to analyze everything effectively to prepare for a profitable sale.
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Succession planning is a big part of every business owner’s business plan. Whether you are passing down your business to your children, or looking to sell your business to an employee or an outside party, there is a lot of planning that needs to be done. EBIT Associates believes that the years of hard work and dedication you have put into your business should be rewarded with a top dollar sale. EBIT will work with you to find the right buyer, who, under the right circumstances, is ready to make the right deal.