Selling Pressure

Due to the recent stock market volatility, I have been hearing the familiar phrase “selling pressure”.  I am not anywhere near an expert on the stock market but I do know something about selling pressure as it relates to businesses.

Our firm’s research shows that Baby Boomers will put an average of 378,000 companies a year on the market through 2029.  According to Capital I.Q., an average of 7,925 privately held businesses were acquired or merged during the years 2007-2012.  Let those numbers sink in, 378,000 per year average vs. 7,925 per year average.  Talk about selling pressure!  The evidence for this increase in selling continues to mount.  According to a recent New York Times article, “The number of small businesses listed for sale nationwide is at a six-year high, according to data compiled by, an online marketplace. The tally of completed transactions is also rising, and the median sale price is up 12 percent compared with prices a year ago(Cowley, August 19th, 2015)”.

This increase in the number of baby boomer companies for sale is turning the market into a buyer’s market.  The type of selling pressure that business owners are facing is the pressure to be competitive and realize the full value of a business they have spent a life time building.

How can boomers prepare for this buyer’s market?  As a start, I strongly suggest the following:

  • Develop an exit transition plan as soon as possible. According to a Hartford article by Brad Kane,  “The BlumShapiro report  “Succession Reset: Family Business Succession in the 21st Century” found that 80 percent of family-owned businesses globally haven’t adequately prepared for an upcoming transition(Kane, August 17th, 2015).”
  • Assemble a success team. This should be in key areas that impact the timing and preparation of the eventual sale. We outline these areas in our book, The Exit Strategy Handbook.
  • Determine the gap between the current value and the desired sales value of your company. The desired sales value gives you a goal to work toward and provides a gauge on the amount of work that needs to be completed and a timeframe.

If you are looking to sell during the next several years, make the selling pressure work for you with a plan, a team, and a goal.

*Cowley, Stacy, (August 19th, 2015), New York Times

*Kane, Brad, (August 17th, 2015), Hartford

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