Copyright (c) 2014 Joseph M. Maas
Have you planned an exit date? Have you planned a successor? Some quick research on the Internet will quickly reveal the odds are about 9:1 you have not yet done these two essential tasks for accelerating and securing your financial success.
You're in for a tumultuous experience if you're thinking about selling your business in the next five to ten years. The Baby Boomers, and you may be one of them, will soon be trying to sell their businesses as they approach retirement. The first of these Boomers are now in their early to mid-60s, and will soon want to cash out and enjoy the next 20 years or so. The situation is, however, there will be a glut of businesses for sale resulting in the likelihood of more supply than demand.
It is very probable that most business people seeking retirement will be unable to sell their business at a price equaling the cash flow they are now able to draw from their business, which means they are stuck and have to continue working to maintain their current lifestyle, maybe for the rest of their lives.
An added complication is that there are likely to be even more businesses for sale than would normally be anticipated for a Baby Boomer retirement wave. Because of the economic setbacks due to the recent lengthy recession, retirement timing for many was delayed, and these businesses, that should have already been placed for sale, have been in abeyance and may be added to the already extraordinary number of businesses soon coming to the block. This circumstance will unquestionably have a deleterious effect on tens of thousands of families when there are no buyers to purchase the business at the price needed to assure a comfortable life in later years.
For those business people who can't sell at the price they need, it will mean more years of ownership in an increasingly competitive environment. Don't let this to happen to you!
It is widely agreed by Baby Boomer business owners that a clearly written and current exit plan is important, but only one in 10 owners have one!
On top of that, most businesses aren't even ready for sale because they are flawed in ways that make them unattractive to the market. It's much like trying to sell your home. You have to fix the leak under the sink, repair the fence in the backyard, prune the apple tree, and replace the tile on the kitchen counter before a buyer will consider a purchase. It's the same with your business; only then can you expect to achieve your sale, and hopefully your retirement security.
Most business owners who sell their business soon regret their decision; they believe they did not receive the full value of their business, or their timing was poor, or they didn't realize they had more options, or did not receive good advice. They suffer seller's remorse and wish they could go back in time and sell their company again, and they would prepare more thoroughly and be better rewarded for the years of hard work they invested.
Can you imagine the disappointment of these owners? Years of labor with only a portion of their dream fulfilled? Watching their business die, or selling for only part of what is needed? This is a heart breaking situation and is fast becoming an unavoidable reality for the tens of thousands of business owners who will soon be offering their company to an unresponsive marketplace in the next five to 10 years. Time is a commodity, and for many owners there will be no second chance, and no margin for an error of this magnitude.
Exit planning is an essential activity for every business owner, and must be regarded as a business best practice. By establishing a comprehensive exit plan with the guidance of a certified professional, you will benefit by not only having put your house in order, but also by possessing more control over the timing of your sale, have access to increased options and opportunities, and create more capacity for the financial and personal outcomes that serve you most.
Of course, the sooner you write your exit plan, the better. Not only can good intentions get shelved, but the longer you wait, the less capable you will be with taking advantage of opportunities that will come…and then will go.
Article Source: http://www.abcarticledirectory.com
Is your business worth enough to secure your retirement? If you're not sure, you need "Exit Insight: Getting to Sold!" by author Joseph M. Maas, an exit planning expert. Now available online
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