Firms for Sale
It will be a buyer’s market for businesses for several years. Baby boomer owners are starting to cash out in growing numbers, with about 750,000 looking to sell by 2009, a 15-fold increase over 2001.Â
Most firms will go to strangers … only 15% stay in families more than two generations. While owners may want to pass the businesses they built on to a son or daughter, children often aren’t interested or may not have the cash that owners need for their retirement nest eggs.Â
Start planning your exit now to get the best possible price. With a smaller Generation X, there will be fewer potential buyers, so owners may have to cut prices or hang on longer than they desire.Â
Expert advice is a must. Accountants, attorneys, appraisers and brokers can all help set a realistic price, find potential buyers and spot problems. Many buyers … from competitors to speculators to venture capital firms … have sophisticated experts on their side. Owners need to match that support to avoid being taken advantage of.Â
One option that’s growing more popular: Selling to employees. Management buyout teams or employee stock ownership plans can work if owners set them up early. Groom your best managers and train them in the intricacies of the operation so the firm will succeed without you.Â
The Kiplinger Washington Editors
Evaluating Your Company’s Weaknesses
Every company has weaknesses; the trick is to fix them. There is a saying that the test of a good company president or CEO is what happens to the company when he or she leaves. Some companies –on paper– may look the same, but
Early Possession
There are times when the buyer and seller think it would be a great idea if the buyer began operation of the business prior to the closing of the sale. Why? Here are some typical reasons:
Why Do Deals Fall Apart?
Why Do Deals Fall Apart?
In many cases, the buyer and seller reach a tentative agreement on the sale of the business, only to have it fall apart. There are reasons this happens, and, once understood, many of the worst deal-smashers can be avoided. Understanding is the key word. Both the buyer and the seller must develop an awareness of what the sale involves–and such an awareness should include facing potential problems before they swell into floodwaters and “sink” the sale.
For Business Buyers and Sellers: A Guide
Your best guide for buying or selling a business isn’t words on paper–it’s the competent presence of a business broker. Although business brokers generally represent the seller, the buyer also reaps the benefits of expert guidance. A business broker provides vital services for both parties and acts as the “glue” for holding together the pieces of the business sale process. Here’s how a business broker will work with both the buyer and the seller: