Business baby boomers beware
Last week I was in Sydney attending the Maus Business Consultants conference. As is the case with any of these sorts of conferences, I learnt a lot. One of the things that I’ve noticed in nearly 40 years of attending conferences, is that most of
the attendees happen to be the most professional in the industry. I believe this is because they are the ones who are prepared to spend the time and money to increase their own knowledge, as well as sharing their knowledge with others.
The highlight of the conference, for me, was being asked to join a working party looking at how we can better help business owners seeking to exit their businesses. I think I was invited partly because I was quite obviously the oldest person in the room, but also because I’d already been through the process of exiting a business.
The rest of the group were very experienced consultants, who truly understood this area. I think we are only about 10 minutes into the discussion, when one of the participants came up with some statistics that really jolted me.
I guess I knew intuitively about these figures, but to hear them articulated so dramatically was a big shock for me.
The first statistic was that 75% of all small businesses, that is businesses with a turnover of less than $5 million per annum, will be on the market within the next 10 years – courtesy of our aging population.
The second fact that really threw me, was that this particular consultant does a lot of work with business brokers who are members of the Australian Institute of Business Brokers, and they had told him that 95% of all businesses that came to them to be sold, were not considered to be ready to be listed.
Of the businesses that eventually were listed for sale, 81% never sold; the business owners just had to close the doors and walk away!
We’ve all heard the old saying “there’s lies, damn lies and statistics”; and you can prove anything you like with figures. However, in this instance, once I stopped and thought about it, they did line up with my own experience over the last 15 years; so I probably shouldn’t have been so shocked.
After working for the last 30 plus years as a financial planner, I know how much of a business owners wealth is tied up in their business and if they cannot profitably exit their business at retirement, then they are going to have a retirement that does not match their expectations.
Now, of course, this is the very reason I decided to set up this new business; for although I wasn’t fully aware of the size of the problem, I was aware that for many of our existing clients, it was fast becoming a problem.
I had intended to, by now, have our new website set up. On the website we will have a couple of tools that will allow you to self evaluate the following;
realistically, what sort of price you could currently expect to get for your business
realistically, how ready is your business is for sale.
Unfortunately, because of Chris’s illness, I’m running behind with some of our set up, which includes the website. However, the workshop highlighted for me the urgent need to give people the opportunity to determine the readiness of their business for exit and the price they could perhaps expect to get for it, NOW.
The website will be ready in the next few weeks, but in the interim, I can give you access to the two tools I mentioned. All you need to do is send me an email at [email protected] and just let me know your name and email address and which of the tools you are interested in (you can access both if you would like) and I will send you the link to get online and do the analysis for yourself.
I have made both of these tools available free of charge and without any obligation, as I think it’s so important that if you are approaching the time for your exit, you should be aware of your true position, so you can make realistic plans to deal with your situation.
I strongly urge you to take this opportunity to check your true situation out now, especially if you are looking to exit your business within the next 5 to 10 years.