Posts Categorized: Seller Articles

Is Your Business Charging Enough For Goods & Services?

A small increase in what you charge for your goods and services can make a tremendous difference to your bottom line.  The fact is that many businesses could charge more for their goods and services than they do, but fail to do so.  Owners often do not realize the great value of charging just one-percent more.  In this article, we’ll explore how charging even slightly more can dramatically impact your business.

Let’s consider a hypothetical example.  A business owner tells a potential buyer that he or she could safely increase their prices by 1.5% and do so without the price increase causing any negative impact to sales or business disruption.  The savvy buyer quickly realizes that the business, which has $70 million in sales, is leaving $1 million dollars on the table by not increasing its prices by 1.5%.  A smart buyer realizes that after purchasing the business, all he or she has to do is institute this small price increase in order to achieve a sizable increase in profits.

In his best-selling book The Art of Pricing, Rafi Mohammed explores the often-overlooked area of pricing.  He keenly observes that one of the biggest fallacies in all of business is to believe that a product’s price should be based on the cost of the product.  In The Art of Pricing, Mohammed points to several examples.  One comes from the restaurant industry.  He points to the fact that McDonald’s keeps entrée prices attractive with the idea of making up profit shortfalls in other areas, ranging from desserts to drinks and more.  Or as Mohammed points out, McDonald’s profits on hamburgers is marginal.  However, its profits on French fries are considerable.

Mohammed’s view is that companies should always be looking to develop a culture of producing profits.  He states, “through better pricing, companies can increase profits and generate growth.”  Importantly, Mohammed points out that it is through what he calls “smart pricing” that it is possible to extract hidden profits from a business.  Summed up another way, pricing couldn’t matter more.

All too often business owners, in the course of their day-to-day operations, fail to place sufficient importance of pricing.  Any business looking to achieve more will be well served by first stopping and taking a good look at its pricing structure. 

Likewise, buyers should be vigilant in their quest to find businesses that can safely increase prices without experiencing any disruption.  At the end of the day, small changes to pricing can have a profound impact on a company’s bottom line.

Copyright: Business Brokerage Press, Inc.

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How to Create a Recurring Revenue Model That Appeals to Customers

Have you struggled to identify a recurring revenue model that will work in your business?

If so, you’re not alone.

Most owners understand the benefits of recurring revenue, such as predictable cash flow and an increase in their company’s valuation, but struggle with where to start. Just changing your pricing from a one-time transaction to a smaller, recurring fee does not make a sticky subscription model.

The first step of creating a recurring revenue model for your business has nothing to do with your billing platform and everything to do with your target customer. The secret to reimagining your business into a recurring revenue juggernaut is to niche way down.

Niche Down

For a recurring revenue model to retain subscribers, it needs to provide an outlandishly attractive value proposition to customers who agree to continue with the service over the long run. To create that kind of delight, you have to find a pain point where a group of customers feels uniform. That only happens when you niche way down.

For example, when Jorey Ramer, the founder of Super, moved to the San Francisco Bay area, he purchased a home. Ramer had previously been a renter and was surprised by the hassles of owning a house.

Ramer realized that everything from the ice maker in his fridge to the lighting in his backyard was susceptible to failing. He decided to create a subscription model that would allow homeowners to pay one monthly fee in return for a mobile app where subscribers can summon a repair person to fix just about anything that could break down in a home.

Last year Ramer raised $20 million from investors, who see the opportunity in putting home repairs on subscription.

Ramer’s first step in creating Super was not to put out a shingle as a home repair professional with a different billing model. Instead, he focused on niching down to a customer group with a common need. To begin segmenting, he picked homeowners. Then Ramer went further and identified a subsegment of homeowners who are not do-it-yourself types.

Some homeowners are tinkerers and don’t mind digging into a “honey-do”” list every weekend, but Ramer knows those aren’t his people. Instead, he chose to focus on the sub-niche of homeowners that don’t want the hassle and surprises that come with homeownership.

How Peloton Made Their Subscription Sticky

At Peloton, the fitness company that started with a souped-up stationary bike and now includes classes on everything from yoga to running, they have adopted a subscription model. Customers buy the bike (or the treadmill) and then subscribe to Peloton’s content package. To make Peloton’s subscription sticky, they didn’t just target people who wanted to get fit, many of whom were happy to go to a gym before the pandemic. Instead, they targeted relatively affluent people who are too busy to go to the gym. While the single twenty-something sees a spinning class at his local gym as a chance to connect with like-minded people, Peloton knew the forty-something mom with three kids often doesn’t have the time to go to the gym. Therefore, they defined their target customer as relatively affluent fitness enthusiasts who don’t have time to go to the gym—a niche of a niche.

Year to date for 2020, Peloton’s share price has more than tripled.

If you’re stuck trying to come up with a recurring revenue model that would work for your industry, segment your customers based on what makes them buy from you. Then determine if one of your niches has a recurring need for something you sell.

 

How can you improve the value of your business?

Complete the “Value Builder” questionnaire today in just 13 minutes and we’ll send you a 27-page custom report assessing how well your business is positioned for selling. Take the test now:

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4 Reasons Why It’s Better to Own a Big Chunk of a Small Company

Is it better to own a big chunk of a small business or a minority stake in a big company?

It’s one of the fundamental questions all owners must wrestle with. Owning a relatively small slice of a big pie has worked out well for both Elon Musk and Jeff Bezos, who recently traded places on the list of the world’s richest person. Musk still owns around 20% of Tesla, and Bezos controls about 10% of Amazon, so they both have chosen to sell most of their company to fund their ambitions. The success of their bet has been amplified lately given the stock market’s run over the last 12 months.

However, selling part of your business comes with some significant downsides. Let’s take a look at four reasons it’s better to own a big slice of a smaller pie.

Operational Freedom

The most obvious benefit of keeping all of your shares is that you get to decide how to run your company. Nobody can tell you what products to launch or markets to enter. You are the king or queen of your kingdom and can decide the rules.

No Pressure to Exit

Tim Ferriss, the author of five books, including the wildly popular New York Times bestseller The 4-Hour Workweek, recently urged his Twitter followers to consider their endgame before investing in a business: “Before you get into an investment position, know how and when you’re going to get out, or at least how and when you will reevaluate. Getting in is the easy part….”

Once you accept outside investment in your business, you must try to earn your shareholders a return. For your investors to realize a gain, you must sell your company (or part of it). Needing to sell so your investors can realize a return means you give up the option to run your business forever and need to start thinking about how your shareholders will get liquid. Some will pressure you while others will wait patiently, but the exit clock starts ticking once you take outside investment.

Nobody Ahead of You in Line

Sophisticated outside investors often demand preferred returns when they invest in your company, which can undermine your take from a sale.

For example, Ana Chaud started Garden Bar to offer fast-casual salads to Portland hipsters. The first store was a success, but the restaurant industry’s thin margins inspired her to grow to get some economies of scale. She raised two rounds of outside capital, including one from a group of convertible noteholders. Chaud skimmed the term sheet but trusted her investors, so she didn’t think much about a clause that gave noteholders 2.5 times their money if she sold the business before the note expired.

Chaud continued to grow to nine locations, with a tenth on the way, when she attracted an exciting offer from Evergreens, Seattle’s fastest-growing salad restaurant. Things were going according to plan right up until Chaud’s lawyer pointed out the investors clause, which had the potential to wash out all her equity.

Chaud agreed to give the proceeds of her acquisition to investors. She negotiated an earn-out, which she hoped would allow her the possibility of a return on her years of sacrifice. Then COVID-19 hit, Portland restaurants were closed, and Chaud ended up with nothing.

Avoid an $80 Million Mistake

The most obvious reason to hang on to your shares is to avoid dilution. When your company is not worth very much in the early days, it can be tempting to give away equity to attract a key team member, but it could end up costing you dearly if you’re too generous.

Take a look at the story of Greg Alexander, who started Sales Benchmark Index (SBI). Alexander started the sales consultancy at his kitchen table and, early into his tenure, gave two employees a quarter share in his business. Ten years later, Alexander ended up selling SBI for $162 million, prompting him to refer to easily giving up half the company as an “$80 million mistake.”

Given the runaway success of some high-profile stocks of late, it can be tempting to consider raising money to fund your growth, but there are still several benefits to owning a big slice of a small pie.

 

How can you improve the value of your business?

Complete the “Value Builder” questionnaire today in just 13 minutes and we’ll send you a 27-page custom report assessing how well your business is positioned for selling. Take the test now:

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3 Steps for Achieving Pricing Power

The simple fact is that most of us want to control our own fate.  This fact is especially true for entrepreneurs and business owners.  However, the truth of the matter is that for most business owners, their fate isn’t completely in their own hands.  For example, a variety of forces can prevent businesses from establishing their own prices. 

Knowing whether or not your company has pricing power is essential and can influence a range of decisions that you may make.  Let’s take a closer look at what steps you can take to control your own pricing.

What is Pricing Power?

This economic term describes the effect of a change in a product price on the demanded quantity of said product.  Your company’s pricing power is linked to the demand for your products or services.  If you have a high level of pricing power, you can raise your prices over time and maintain your customers. 

Who Has the Greatest Pricing Power? 

It is no great secret that the Amazons, Apples, Wal-Marts and auto manufacturers of the world exercise a tremendous amount of power.  Part of this considerable, and seemingly ever growing, power resides in the fact that the size of these companies now rivals and even surpasses many nation states.  This grand level of power is unique in human history in many ways.  Along with it comes the ability to exercise an almost god-like authority over suppliers. 

Today, these ultra-powerful companies commonly dictate to vendors what prices they are willing to pay, and the quasi-monopolistic nature of these companies often leaves vendors with no choice to comply.  In short, these 900-pound gorillas are telling companies both large and small exactly how much they will pay for a given number of bananas. 

Step 1 – Providing a Branded Product or Service

If you discover that your company doesn’t have pricing power, there are steps you can take.  One step is to produce a branded product or service.  In this way, you are able to offer something of greater value than your competitors.  Through having a branded product or service, it is possible to create a higher perceived value in the minds of not just the Amazons of the world, but in the minds of consumers as well.

Step 2 – Innovating 

Another path towards achieving pricing power is through innovation.  A great example of leading the way in innovation is Apple.  While few companies have Apple’s almost ethereal resources, that is not to say that you cannot find ways to innovate within your own sphere or industry.  Small innovations can often have an outsized impact and help a business stand out from a crowded playing field.  Innovation that leads to patent production is an excellent way to gain a degree of pricing power.

Step 3 – Offering Exceptional Service

A third option for achieving a degree of pricing power is to provide what could be called “mind-blowing” service.  By providing service that is truly a cut above what the competitors can match, your company is positioned to achieve pricing power.  Providing your customers with something they simply can’t get elsewhere is a key way to setting a price that is more in line with what you desire.

There are many marketplace variables that your business can’t control.  The trick is to evaluate your business, your business’s potential and the concrete and practical steps you can take starting today to achieve pricing power. 

Copyright: Business Brokerage Press, Inc.

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John Warrilow’s The Art of Selling Your Business

John Warrilow is the founder of The Value Builder System and accomplished author.  While not a business broker himself, Warrilow has gathered considerable knowledge and expertise on the industry.  His previous book Built to Sell was listed as one of the best business books of 2011.  In this article, we will explore some of the key points in Warrilow’s latest book, which is entitled The Art of Selling Your Business: Winning Strategies and Secret Hacks for Exiting on Top.  This book was released on January 12th, 2021 and is proving to be invaluable for business owners. 

Selling When the Time is Right

One key focal point of the book is that business owners should skip trying to find the perfect “magical time” to sell their business.  Additionally, Warrilow notes, “I make the strong recommendation in the book that the best time to sell your company is not during some mysterious macroeconomic environment.  It is when someone is willing to buy it and you get an offer.  And that is because at that point, you’re in the position of strength.”

The DIY Approach 

This book reinforces the fact that business owners truly need to work with an intermediary if they are to achieve optimal results.  Warrilow even includes his six reasons for why every business owner should hire a business broker or M&A advisor.

Many business owners think that they can simply handle selling their business on their own.  But the simple fact is that business owners usually have no experience in selling a business.  Add this to the fact that selling their business is likely to be the most important financial decision the business owner ever makes, and it quickly becomes clear that business owners are doing themselves a considerable disservice when they opt to handle everything on their own.  

A Business Broker vs. a Lawyer

As Warrilow points out, oftentimes business owners think that rather than working with a business broker or M&A advisor, they can turn to a trusted lawyer who has served them in the past.  But this thinking is flawed when it comes to successfully selling a business.  As Warrilow states, “a lawyer, almost by default, is going to be very conservative as everything exposes a lawyer to risk.  And that is why using a traditional attorney is almost always a mistake.” 

If you are planning to sell your business now or in the future, a book like Warrilow’s The Art of Selling Your Business: Winning Strategies and Secret Hacks for Exiting on Top can serve as a uniquely valuable tool in your toolbox.

Copyright: Business Brokerage Press, Inc.

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Why Businesses Get Into Trouble

No two companies are quite alike, and this also means that there are many reasons why companies can fall into trouble.  While the number of variables involved in operating a company are practically endless, there are a handful of reasons why companies can fall on hard times.  Let’s take a closer look.

Lacking Focus

Companies that lack focus can often run into considerable trouble.  Not understanding their customers and what they need or want can lead to endless problems.  It is vital that companies frequently stop and assess who their customers are and whether or not they are properly servicing their needs.

Management Problems

Not too surprisingly, many companies can run into trouble because of poor management.  Management problems are not one-dimensional, but instead take a variety of shapes.  Management that isn’t focused, is incompetent, or simply doesn’t care about the business can translate into a business’s premature death. 

Under the umbrella of “management problems” also falls such missteps as poor financial controls, quality control problems, operational issues, and/or not keeping up with technological advancements.  At the end of the day, many of the problems on our list have at least some management issue missteps at their heart.

Loss of Key Employees or Clients

The loss of a key employee or a key client can spell serious trouble.  Of course, no management team can predict every eventuality.  However, when there is a loss of a key employee or client, and there is no plan for replacement, then management does shoulder at least some of the blame.  The savviest companies take steps to ensure that there are ways to replace the most important employees and clients.

Failure to Compete 

More than one business has been buried by the competition or failure to see a new wave of competition coming.  For example, countless mom and pop video rental stores were absolutely bludgeoned by the introduction of Blockbuster Video a generation ago. 

While it is true that sometimes market forces are so aligned against a business that survival is almost impossible, that is normally not the case for most businesses on a year-to-year basis.  The most effective and competent management can see the competition out on the horizon.  Or at bare minimum, they have an emergency plan in the event that the competition becomes more intense.

All too often by the time a business realizes that it is in trouble, it is already too late.  If the problems can’t be fixed, then it may be time to consider selling the business.  But such decisions must be made quickly in order to prevent additional bloodletting.

Optimally, a business is sold while it is doing well.  Regardless of whether a business is thriving or experiencing difficulties, a business broker or M&A advisor can be an invaluable ally in helping a business reach its full potential.

Copyright: Business Brokerage Press, Inc.

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Maximizing Your Time by Rating Buyer Seriousness

Your time is your most valuable commodity.  The simple fact of the matter is that many “buyers” are not truly buyers.  In contrast, they are often window shopping or acting out a fantasy of buying a business.  In other cases, they would only plan to buy if they were to find the “deal of the century.”  The last thing you want to do is waste your time trying to work out deals with people who aren’t serious or qualified buyers. 

The Plus and Minus System

The best way to find a serious buyer is to use a “plus and minus” system.  This system will help you weed out the window-shoppers from buyers that are truly worth your time. 

First, let’s evaluate factors for which you’ll want to deduct points.  If a buyer needed outside financing, then subtract 4 points.  Likewise, if a buyer has been looking for 6 months or more, you’ll want to also subtract 4 points.  If a buyer has no cash available, you should subtract 3 points.  Additionally, if a buyer is currently working in the corporate world, you should also subtract 3 points.  These are the 4 largest reasons to subtract points, but they are not the only reasons. 

Below are a few reasons to subtract 2 or 1 points from a buyer’s rating.

  • You learn the spouse is not supportive – Subtract 2
  • Prospective buyer uses a legal pad or clipboard and takes copious notes – Subtract 2
  • The buyer indicates that they are in “no rush” and want to find the perfect business – Subtract 2
  • The buyer is under the age of 25 or over the age of 62 – Subtract 1
  • The buyer is currently renting even though he or she has lived in the area for some time – Subtract 1

Factors to Add Points In

There are also many factors that would make a buyer fall onto the “plus” side.  If the prospective buyer does not currently have a job or has just resigned from their job, then add 3 points.  Likewise, if a prospective buyer acknowledges that books and records are not the only metrics by which to judge a business, add 3 points. 

Add 2 points if a buyer has enough money to buy the business and another 2 points if the buyer currently has no dependents.  If a close relative or family member currently owns or has owned a business in the past, then add 2 points.  If the buyer is between the ages of 25 and 62 add 1 point.  If he or she is a skilled worker or professional, add 1 point.  Finally, if the buyer does not consider location to be a prime consideration, add 1 point.

This streamline, straightforward and relatively simple system does work.  Use this system consistently, and you will quickly eliminate a large percentage of window shoppers.  While no system is perfect, this “plus-minus” system for accessing prospective buyers will save you countless hours and many potential headaches.

Copyright: Business Brokerage Press, Inc.

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The Journey Ahead: Map Out Succession, Retirement, and Estate Plans Before You Exit Your Business

By JoAnn Lombardi, VR Business Brokers/Mergers & Acquisitions, President

You’ve worked for many years to build a successful business, and now you’re starting to think about retirement. To ensure a smooth exit from the workplace, establish your retirement and estate plans now — well before you’re ready to sell or transfer.

Early planning will help ensure that you adequately provide for your retirement needs and the financial security of your heirs. It will also foster the continued success of your company and its employees.

Assess Where You Are
Before determining where you want to be when you’re ready to retire, assess where you —- and your business — are financially today. It sounds like a large undertaking, but you can start by preparing a detailed financial analysis of your business with the help of a valuation professional at VR. This expert will review historical data to determine your company’s current value. You will also need to examine all contracts and agreements to make sure your business is transferable. Transfer restrictions, such as professional license restrictions, franchise agreements, lending agreements, shareholder agreements or other types of contracts, can slow down the process significantly.

Plan for Success (ion)
Next, develop a succession plan that outlines how your business will be sold or transferred. If you have business partners, they will most likely be able to buy your ownership interests according to the terms of your company’s shareholder agreement or other agreements established among you. Or you might choose to groom one of your children to eventually take the helm. To ensure a smooth transition, however, your successor should assume significant management duties and at least partial ownership before you retire.

If you have no qualified family members or partners, consider selling the business to a key employee or group of employees. Employee buyers may have several financing options, including private equity partners, bank loans, and Employee Stock Ownership Plans (ESOPs). ESOPs are fairly complex structures and will require valuation and tax planning — as well as employees who are committed to the company for the long haul.

Think Retirement
The first considerations for retirement planning are your health, lifestyle, and any financial obligations. You will use these to determine your required revenue stream.

In addition to qualifying for Social Security benefits, you likely have retirement accounts such as IRAs or 401(k), Keogh, or Simplified Employee Pension (SEP) plans. When tapping these accounts, be sure to avoid actions that could have negative tax consequences. Also bear in mind that minimum distribution rules govern many tax-deferred retirement accounts. Traditional IRAs, for example, compel you to begin taking distributions after age 70 ½ or face significant penalties.

Also, certain corporate entity formations may provide options for additional distributions and more favorable tax treatments. Consider changing your corporate structure and placing assets where they facilitate the most cost-efficient succession. This is where a professional investment advisor is essential.

Even if you’ve managed your own investments thus far, a financial planning expert and tax advisor can help determine whether your retirement funds are likely to support your plans.

These experts also help you ensure your assets are well diversified in a way that doesn’t put your nest egg at unnecessary risk. A high concentration in one asset, such as your business, could result in a precarious financial situation if the asset were to decline significantly in value.

You might also want to consider staying with your company after the sale — perhaps as a paid consultant or salaried employee. Doing so may provide extra income that allows you to put off tapping your retirement accounts and investments, and you’ll be able to continue contributing to your taxadvantaged retirement plans. But working part-time also has tax consequences, so be sure to discuss any such plans with your financial advisor.

Protect Your Estate
Just as important as succession and retirement plans is an estate plan. If you haven’t already, write a will and appoint an executor to oversee the distribution of your assets when you die.

Trusts can help you avoid the costs and inconvenience of probate. Trusts may also protect assets from creditors, provide privacy, and come with professional investment management services. Your circumstances — including your assets’ estimated value, their allocation, and your beneficiaries — will help determine the structure and tax implications of your ideal trust. Trusts can also be designed with special provisions. You might, for example, want to:

  • Manage wealth through fiduciaries for living family members,
  • Ensure the support of a child with special needs,
  • Make a gift to a favorite charity, or
  • Create tax-friendly structures.

If you decide to make a trust a component of your estate plan, be sure to appoint a trustee who’s a neutral party you can trust.

Pick Your Partners
Planning your exit strategy, retirement revenue and estate distribution isn’t a simple task. At this critical juncture of your life, legal and financial professionals are essential partners.

 

How can you improve the value of your business?

Complete the “Value Builder” questionnaire today in just 13 minutes and we’ll send you a 27-page custom report assessing how well your business is positioned for selling. Take the test now:

Sellability Score

10 Resolutions That Will Boost the Value of Your Company

Finally, 2020 is in the books.

Good riddance.

If your goal is to build a more valuable company in 2021, here are some New Year’s resolutions to consider:

  1. Stop chasing revenue. A bigger company is not necessarily a more valuable one if the extra sales come from products and services that are too reliant on you to deliver them.
  2. Start surveying your customers using the Net Promoter Score methodology. It’s a fast and easy way for your customers to give you feedback, and it’s predictive of your company’s growth in the future.
  3. Sell less stuff to more people. The most valuable companies have a defendable niche selling a few differentiated products and services to many customers. The least valuable businesses sell lots of undifferentiated products and services to a concentrated group of buyers.
  4. Drop the products or services that depend on you. If you offer something that needs you to produce or sell it, consider dropping it from your offerings. Services and products that require you suck up your time and cash and don’t contribute significantly to your business’s value.
  5. Collect more money up front. Turn a negative cash flow cycle into a positive one and you boost your business’s value and lessen your stress load.
  6. Create more recurring revenue. Predictable sales from subscriptions or recurring contracts mean less stress in the short term and a more valuable business over the long run.
  7. Be different. Refine your marketing strategy to emphasize the point of differentiation that customers value. Be relentless in highlighting this advantage.
  8. Find a backup supplier for your most critical raw materials. Consider placing a small order to establish a commercial relationship and diversify the sources of your most-difficult-to-find materials.
  9. Teach them to fish. Answer every employee question of you with “What would you do if you owned the business?” Your goal should be to cultivate employees who think like owners so they can start answering their own questions without coming to you.
  10. Create an instruction manual. Document your most important processes so your employees can do their work independently.

Here’s to building a more valuable company in 2021!

 

How can you improve the value of your business?

Complete the “Value Builder” questionnaire today in just 13 minutes and we’ll send you a 27-page custom report assessing how well your business is positioned for selling. Take the test now:

Sellability Score

Ownership Transition Survey Results

Mass Mutual Life Insurance produced an ownership transition survey back about a decade ago.  The survey results were based on feedback and answers from family-owned businesses.  It produced some very interesting results, and is worth examining even today.  While the survey at this point is quite outdated in terms of the timeline, there are still many valuable nuggets of information to be gleaned from it.  Let’s dive in and take a closer look at the numbers and what they can tell us for 2021 and beyond.

While the Mass Mutual Life Insurance ownership transition survey had a range of important points, the one that leaps right off the page is the fact that a whopping 80% of family-owned businesses are still being controlled by their founders.  A large percentage of those founders are Baby Boomers who will have little choice but to retire in the next few years.

The survey indicated that 55% of CEOs over the age of 61 or older have yet to choose a successor.  This fact serves to emphasize the fact that a “retirement wave” will hit family-owned businesses, and this will lead to some interesting shifts and opportunities.  And while the survey indicated that 13% of CEOs state they will never retire, the reality of the situation is that ownership will eventually change hands.  Business brokers can expect to see an unprecedented wave of interest in their services.  Additionally, prospective buyers will also have a highly unique opportunity to buy established businesses.

The survey also indicated that 30% of family-owned businesses will be changing leadership within the next five years.  Of course, with that change of leadership, many possibilities open up, including the possibility of selling.  However, it is important to note that while there will be a “retirement wave” amongst the Baby Boomers, not all businesses currently owned by Baby Boomers will be placed on the market.

The survey noted that 90% of businesses currently plan on remaining family-owned, and 85% of businesses plan on having their next CEO be a family member.  However, it is important to keep in mind that even if these numbers were to hold true, that means at least 10% of businesses will be up for sale.

It is likely that this number is far higher now than when the survey was conducted due to the aging nature of the Baby Boomer population and owners looking to sell because of pandemic related issues.  Simply stated, there will be no shortage of businesses for sale in 2021 and beyond.

Another important aspect of the survey to consider is the fact that family-owned businesses are not prepared to sell.  According to the survey, 20% of family-owned businesses have not completed any form of estate planning, and 55% of family owners do not have any formal company valuation for estate tax estimates.  Combine these statistics with the fact that 60% of businesses do have a written strategic plan, and it becomes clear that family-owned businesses, especially those considering selling in the future, are most definitely in need of professional assistance.  Many family-owned businesses are ill prepared for the future and have a range of vulnerabilities.  Business brokers and M&A advisors are uniquely positioned to provide those services.

Copyright: Business Brokerage Press, Inc.

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