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