It Takes Longer Than You’d Think

From the Desk of Jim Moore………………..

Often when I’m talking to business owners coming towards retirement they talk of ” selling my business and retiring “…..almost as if when the point in time comes when they decide to retire a buyer with adequate funds will simply turn up on their doorstep.

The reality for many business owners is very different :-

*.Some business owners still haven’t found a buyer for their business two years after putting it on the market and that’s even with the help of a specialist business sales broker.
* Even once a buyer is found that buyer will often want the seller to remain substantially involved in a handover period of often six to twelve months.

So the reality is that you need to start looking for a buyer of you business ideally three years or so before you actually want to commence on your retirement. Actually this is an opportunity.

It’s a three year window of opportunity to get your business into the best possible shape in order for you to sell it at the best possible price.

Some key factors that will determine the price you will achieve for your business are :-

1. Continuity of senior management. Of course the stronger the senior management team in your business the less time a buyer will insist on for you staying on in the business for a lengthy hand over period.
2. The size of your business……bigger businesses tend to achieve bigger prices not least because their increased scale help them afford that management team per 1 above.
The scale issue can often be addressed by a well planned merger or acquisition. The senior management in place in your merger partner or acquisition may well be the solution to strengthening your senior management team. An acquisition can be made even with little investment capital available if careful thought and some imagination is applied to the financial structuring of the deal and there is flexibility on both sides of the table.
3. Adequate and effective systems in your business are a third factor that astute buyers value highly and which will have a big influence on the price a business sells for.

As the baby boomer generation continues to retire in greater and greater numbers the imbalance between the supply of businesses for sale and financially sound buyers move further in favour of those buyers.

So I urge you to take adequate time to plan to maximise the price you get for your business. You’ve worked hard, probably for many years, building up your business. You’re only going to sell your business once so you need to make sure that you work just as hard on getting the best price possible for the sale of your business.

If you’d like to discuss any of the above in the context of your own particular situation then please don’t hesitate to get in touch with me :-

Email : jim@jwmbusinessadvice-accountancy.com
Phone : 0141 – 280 – 0404

I’ll look forward to hearing from you.

Jim