Boomer business owners who are not leaving the company to their heirs are often finding themselves:
- Running the business for a lot longer time than they ever planned.
- Selling the business in hurry at a bargain basement price, thus increasing the odds that they will not have enough money to retire comfortably.
- Resorting to using a business broker and having their companies on the market for months, perhaps even years.
- Closing down and walking away- even though the business is still profitable.
Within a few years, the number of business owners ages 55-75 who want to sell, or who must sell due to health or other adverse life circumstances, will double.
For many of these owners, the successful sale of the business is the cornerstone of their retirement plan, comprising the bulk of income they expect to receive in their later years. Most of these pre-retiree entrepreneurs have just one shot at selling their companies. A small mistake could cause them to run out of money in retirement or have to drastically alter their lifestyles to accommodate limited income.
Unless there is an actionable exit plan in place at least two years before they want to retire, boomer owners could face a truly painful situation when the time comes to leave.
After all, the current “old school” sales process has a lackluster 3% success rate right now. It’s not a stretch of the imagination to suggest that this rate could go even lower as the critical mass of pre-retirees wanting to sell builds.
If you are a business owner over 55 who is planning on selling a business to fund your retirement, then you need to find a qualified mentor to help guide you through the complexities of the exit process.
Business brokers should always be the LAST resort if you are serious about selling your business for more money, with less stress, and with a view to creating a stream of income you can’t outlive. Most brokers cannot do that for a seller, even if they want to. It’s better instead to seek guidance from an experienced business owners who has been in the trenches and understands what selling a business is all about.
If you do, however, decide to use a broker, or if you seek the advice of a business acquisitions mentor, you must exercise due diligence or risk an adverse outcome.
Be certain you thoroughly check out the qualifications of these advisors.
Always insist on someone who:
1. Has a minimum of 10 years experience in the real business world.
An MBA is nice, but ask your mentor about actual businesses he or she has bought and/or sold. Theorists and philosophers have zero value when the time comes to actually SELL a company. Look for solid, quantifiable experience.
2.Can produce verifiable client testimonials.
Any worthwhile mentor or broker ought to be able to produce real clients with whom you can speak. If the only thing he or she is willing or able to give you is some vague written testimonial from “Sam S.” (who may or may not be a real person) then you should avoid that consultant.
3. Asks you important questions about your desires and goals for the sale.Â
Part ways with any so-called expert who doesn’t want to hear your wishes, concerns, and ideas.
4. Has the knowledge, tools, and business acumen .
That are essential to a successful business transition. This is no place for hobbyists or dabblers. Demand someone who specializes in buying and selling successful businesses. Don’t be afraid to ask the question, “How many deals have you personally done?”
5. Knows how to structure the sale proceeds so that you get a predictable.
Reliable stream of income for life. Ask potential mentors the question. “What can you do to help me ensure that I never outlive my retirement income?”
There are several other important factors to consider when partnering with an expert, including some less tangible, but nevertheless important factors that should be present.
