Its a sad fact that only 8% of small businesses are sold for a decent price. This is not good news if you are relying on selling your business for your pension, or indeed for any other purpose. However, many more businesses would be saleable for fair value if the owners had planned their exit in good time. Exit strategy Will you transfer your business within your family, or do you want to sell it - to an employee, or to an outside purchaser? How much do you want for it? When? Will you stay with it or move on? You'll need to think this through because your exit strategy will determine how you go about positioning your business for its eventual sale. Positioning your business for sale You’ll start with a valuation and you’ll almost certainly find it is well below what you need. So, then you’ll need an analysis of your business to show you what has to be done to achieve your price. This may include: getting your accounts in shape and audited; some growth, not the least to show … [Read more...]
Business Baby Boomers Benefit from Exit Strategy
After the second world war, there was a surge in the population which is now more commonly known as the baby boomer generation. Sixty or so years on these baby boomers have started to retire. In fact in the UK in 2006 there were more pensioners than children and by 2029 there will be some 5M more baby boomer pensioners. There are about 4M businesses in the UK and of these about 3.2 million are one person businesses with a further one million having up to 249 employees. It is estimated that, as the baby boomer owners start to retire, 30% of these businesses will transfer ownership during the next 10 years. That is 1.5 million businesses! And with fewer younger entrepreneurs coming through many of these businesses will not be sold but simply shut down. According to the Office of National Statistics 67% of us either have no idea or only know vaguely how much our pensions will be. And many of us do not think we can live on whatever pension provision we have made. The sad fact is that … [Read more...]
