“People buy on emotion, not facts. So, we looked closely at the target markets and applied solid marketing strategies. The result … we’ve sold our companies for a healthy profit.”
Sadly, baby boomers need a lot of help.
According to Mike Kramer, CEO of ManageHub:
“Over 70% of businesses [in the U.S.] are owned by baby boomers who are nearing retirement, and over 80% of baby boomer businesses are not ‘transaction-ready,’ meaning they are unlikely to find a buyer.”
It’s true for boomers around the world.
Let’s go back to Sigrid.
Originally from Germany, she moved as a young woman to Australia where she ran several thriving operations over the years. She’s also tackled alliances in Southeast Asia, Hong Kong, and Europe.
The accomplished entrepreneur launched a jewellery store—without any experience—where she quickly doubled sales and profits. “My husband-partner knew how to fix clocks, but I had to train as a gemologist after discovering my sales staff didn’t know anything about stones,” says Sigrid. She laughs while recalling, “I learned about fresh-water pearls, coloured stones, diamond recognition, and metal technology.” Then she trained the staff.
She sold the jewellery store for double her investment three years later. Next, Sigrid bought into the office supply business—something else she didn’t know anything about. So, the serial entrepreneur asked her accountant for ideas on how to make better margins from pencils and small office equipment.
“I paid $1600 to that accountant who gave me a benchmarking report with some graphs to look at. That did not help, at all!” recalled Sigrid. “I needed systems for my plan to improve the margins and prepare the company for sale.” We know that established programs give a clear sense of how a business operates.
“If you aren’t tracking and organizing your internal processes—your way of doing things—how will the new owners know which steps to take once they take over?”
These are integral steps for small business owners to follow when they decide it’s time to find a buyer. Especially now when the markets have improved for an exit.
Here’s what BizBuySell.com—a noted business market on the Internet—tells us:
- There are an estimated 29.6 million small firms in the U.S.
- A total of 5,383 sold during the first two quarters of 2018
- This put the year on pace to surpass 2017’s record-high of 9,919 transactions
- In the small business market: The asking prices increased 4% from Q2 of last year to $260,000, raising the median sale price 4.4% to $239,000
According to the Australian bureau of statistics, only 21% of business owners Down Under successfully sell their company. That means 80% of small- to medium-sized business might not fund their retirement.
The statistics will be familiar to owners in Canada.
Knowing when it’s time to sell is another vital decision.
In my case, I owned a magazine for business people with my late husband. We launched special events, sponsorships, and international ventures with organizations in Europe, the U.S., and Mexico that wanted to nurture contacts in Canada.
The magazine was positioned online during the early days of social media—Twitter, Facebook, and LinkedIn. The magic for me was in reaching new readers by publishing content by our thought-leading columnists and inspired photographers. Keeping up the database also was a priority—given experience from my direct response marketing days in the charitable sector.
The magazine sold at a time when traditional media outlets were going broke around the world. Of course, small business moves on a dime compared to multi-nationals, which gave me an edge; the timing was prescient. Yet, the new owner was more interested in a popular event we hosted for young entrepreneurs than the magazine itself.
That’s another tip for selling a business: sometimes, a buyer is searching for an opportunity other than the obvious. They may be looking for assets to leverage their own product lines.
The magazine sale also opened another door for me. An invitation came from investors to build an internet portal with an international team for wellness experts. Those valuable lessons from the early days of online marketing combined with a life in business are useful for business owners today preparing to sell.
Sigrid and I share a passion for helping others to see their dreams come true.
We and TPNI Engage are sharing our 7-Step system of 43 videos and worksheets for business owners to realize the real value of their company. Yes, accountants, lawyers, and bankers know the financial undertakings. However, the knowledge of how to better market those assets once they’re counted could make the difference between floundering and success.
We get this.
Small business performance is rising. We want baby business boomers to retire … or to start up another enterprise in their retirement years … by taking advantage of higher sale prices and promising buyers.