Read the full article at: www.nerdwallet.com
With a large number of Boomers now approaching their retirement years, many of them are planning to exit their business. They’ve already begun the process of making plans and taking the steps that need to be taken in order to exit their business and hand it over to a new owner.
Terry and Patricia Palermo, who own a small manufacturing company in Ohio have been planning for over a year. Now in their 60’s, they expect to exit their business in about 2-3 years.
Boomers are a huge influence on the small business economy. In 2009, the Ewing Marion Kauffman Foundation reported that from 1996 to 2007, Americans in the 55-64 age group had a higher rate of entrepreneurial activity than those ages 20-34.
After the 2008 crash, many Baby Boomers transitioned into business owners after losing their jobs, while other existing owners, such as the Palermos, managed to get their small businesses through the tough times. For the next few years, selling a small business was difficult; demand was weak, while small business loans were difficult to obtain.
Now the market has improved and sales of small businesses are beginning to pick up. A recent BizBuySell Insight Report showed small business sales transactions were strong in the first quarter of 2015, growing 6 percent year over year, continuing a two-year trend of exceptionally robust activity in the business-for-sale market. According to recent surveys, sellers and business brokers attribute the transaction increase to the growth of both supply and demand in the business-for-sale market. Baby Boomers continue to supply the market with quality listings as they reach retirement age, and buyers are moving forward with their small business ownership plans.
Buyers also have access to more lending options than before. With new SBA programs and the emergence of alternative lenders, such as OnDeck, NerdWallet and Kabbage, there are many more options for entrepreneurs to fund the purchase of a business.
But as the market picks up, and more Baby Boomers are thinking about exiting their business, it’s important to plan ahead in order to maximize the business value. This includes getting the business financials in order and developing a growth strategy. For more information on preparing a business for sale, download the free BizBuySell Guide to Selling Your Small Business.
“Retirement is around the corner for many baby boomers; a number of small-business owners of this generation are finding it’s time for a major move: selling.”