Maximizing the Value of Your Business in the Face of the 'Silver Tsunami': Tips for Baby Boomer Entrepreneurs
As baby boomers approach retirement after many years of owning and operating their business, many are looking to sell their businesses and finally enjoy the fruits of their labor. In fact, there are so many boomers nearing the age of retirement seeking an exit from the business world that it’s been dubbed the "silver tsunami," and it's causing concerns about the fate of these businesses.
It's estimated that over the next decade, trillions of dollars' worth of baby boomer-owned businesses will be put on the market. This has led some to speculate that these businesses will fetch top dollar, given the sheer volume of them available.
However, the reality is likely to be quite different. Many of these businesses are small, local operations that may not have the same level of appeal as larger, more established brands. Furthermore, the current economic climate is uncertain, which could make potential buyers hesitant to take on the risk of purchasing a business. Additionally, baby boomers may have unrealistic expectations about the value of their businesses. They may have put their heart and soul into building their companies, and it can be difficult to separate emotional attachment from financial considerations. This can lead to them setting their asking price too high, which could deter potential buyers.
So, what does this mean for the "silver tsunami" of baby boomer businesses? It's possible that many of them may not sell for the prices that their owners are hoping for. However, this doesn't necessarily mean that they will go to waste. Many baby boomers may choose to:
Pass their businesses down to family members or employees
Consider alternative exit strategies such as finding a partner or merging with another company
It's important for baby boomers looking to sell their businesses to realize that they have the power to increase their chances of finding a suitable buyer. By taking the following steps, they can make their businesses more attractive to potential buyers:
Invest in the technology necessary to bring their operations up to current standards. In today's digital age, buyers are looking for companies that are up-to-date and able to compete in an increasingly competitive market. By investing in the latest software and hardware, baby boomers can make their businesses more appealing to potential buyers.
Increase systems and processes so the owner and their institutional knowledge isn’t required for the successful running of the business. If a business relies heavily on the owner for its day-to-day operations, it can be a major turn-off for potential buyers. By increasing systems and processes that allow the business to run smoothly without the owner's constant presence, baby boomers can make their businesses more attractive to buyers.
Protect their reputation by collecting social proof. This can include gathering customer reviews, testimonials, and case studies that demonstrate the value of the business. These types of materials can help to build confidence in the business and increase its value in the eyes of potential buyers.
Finally, it's crucial for baby boomers to get their finances in order before selling their businesses. This includes preparing financial statements, tax returns, and other important documents that will be required during the sales process. By doing this in advance, baby boomers can make the process of selling their businesses smoother and more efficient.
While there are clear steps that business owners can take to increase the chances of their businesses selling for maximum value, most steps generally require time to implement and too often aren’t considered until too late. We recommend implementing these steps sooner rather than later.
Don't let the "silver tsunami" sweep you away. Contact the Audacious Innovations team today and let us help you get your business ready for sale. We’ll assess your business and guide you through the process and maximize the value of your business. Reach out to us and take the first step towards realizing your retirement dreams!