In a recent Inc. magazine article, Bo Burlingham said, “What we do know is we’re heading into a period when exits are going to be very much on the minds of hundreds of thousands of business owners, especially aging baby boomers. Its members are now moving into their 60s and 70s. As it is, just 20 percent of companies being put up for sale are sold, according to a study by the U.S. Chamber of Commerce. But as more baby boomers try to sell their companies, the market may get crowded and selling could become more difficult (Burlingham, p. 134).”
Burlingham’s above quote could be a severe understatement. Our firm’s research indicates the impact of boomer owned companies entering the market will increase the average of privately held companies for sale from 24,000 to 378,000 per year through 2029! We call it the Baby Boomer Tsunami™ and it is very real (Mills, p. 35, 36).
Obviously, not all companies entering the market during the next several years will be sold, or if sold, will not realize the value anticipated by the owners. How can business owners be prepared? In his article in Inc., Burlingham relates the story of one business owner that missed a chance to sell his company for more money. “I just can’t believe we didn’t have an exit strategy. We’d never even discussed it. It was one of the worst mistakes of my career. I bungled my own first exit, and I watched several of my contemporaries bungle theirs. Many entrepreneurs have invested their lives in the companies they’ve started. To wind up with little or nothing to show for it is really heartbreaking (Burlingham, p. 134).”
If you have not prepared an exit strategy, it is imperative that you begin now. Do not allow years of “blood, sweat, and tears” to be in vain by severely under selling your company, or worse, simply having to liquidate in the coming buyer’s market.
As Burlingham says, “The fact is that if you have not yet begun thinking seriously about your exit, you’re taking an enormous risk (Burlingham, p. 134).”
*Burlingham, Bo, (Inc. 2014/2015), The Exit Lab
*Mills, Jerry L., (2013), The Exit Strategy Handbook