At the beginning of July, BizBuySell.com reported that a record number of small businesses changed hands in the first half of 2018, which they attribute to the growing number of Baby Boomers exiting their businesses and improving business financials.
A total of 5,383 businesses sold through June, 2018, putting the year on pace to surpass 2017's record-high of 9,919 transactions. In Q2, 2,705 businesses changed hands, an increase of 6.7% over the same time last year and the most of any quarter since 2007.
According to BizBuySell's latest demographic survey, Baby Boomers still own the majority (53%) of small businesses. And, nearly 60% of Baby Boomers plan to sell their business within the next two years or less.
Bob House, president of BizBuySell.com and BizQuest.com, said: “As America continues to see a swell of Baby Boomers reach retirement age, the market will likely continue to see a strong inventory of businesses for sale. Meanwhile those same businesses, many of which dug their way out of the last recession, now have the financial performance they need to earn an acceptable sale price." Bill Luce, President of Transworld Business Advisors, added: "As Baby Boomers continue the strong tailwind, this market trend is sure to stay in style for years to come."
The Bottom Line:
There are numerous indicators that now is a great time for business owners to transition out of their businesses but owners must be ready to take advantage of this opportunity -- from a market perspective and from a financial and personal standpoint. The best way to maximize your business value, determine the best transfer strategy and achieve your goals is to plan in advance. Creating a Business Ownership Transition Plan (BOTP) will align an owner’s goals and personal financial needs with the best sale or transfer options available and provide a comprehensive roadmap to a successful outcome.
Other Business Transition News
The Seeds Of A Company’s Destruction Are Sown in Good Times (Family Business Institute)
A video blog from the Family Business Institute about how business leaders should prepare for adversity when they think things are going well rather than reacting at crisis time.
3 Reasons You’re Not Building A Sale-Ready Business (Allan Taylor M&A)
Allan Taylor M&A looks at three reasons why business owners are not actively engaged in making sure their businesses are sale-ready.
The value of announced mergers reached record levels in the first half of 2018, with acquisitions of American companies making up the largest portion.
How Anthony Bourdain's Estate Plan Reflected the Two Most Important Parts of His Life (Forbes) Bourdain was thorough in making provisions for his only child as the bulk of his estate will pass to her. While this may have been expected, keep in mind that in 2017, Caring.com found that 60% of all Americans don’t have an estate plan. For Gen X and Millennials, currently in their child-rearing years, the numbers are even higher at 64% and 78%, respectively.
Our mission is to assist the owners of privately held companies in making key transition decisions that impact their future as well as the future of their businesses, families, and employees.
As a business owner and co-founder of BTA, Jane Johnson recognized the need to educate business owners about the importance of planning ownership transitions to achieve their goals and ensure business continuity. The challenges Jane experienced with selling her own business inspired her to co-author the book Cashing Out of Your Business – Your Last Great Deal and develop tools and resources to inform and empower other owners to plan and execute successful ownership transitions.
Jane and her team of Business Transition Mentors also offer business transition advisory services to companies with annual revenues of more than $5 million.