A recent article in Globe & Mail details the fact that the majority of small business owners who are ready to sell their businesses in 2019 are completely unprepared to do so. With SO many other business owners out there planning to close up shop and sell their businesses for a nice exit in a baby-boomer-filled market, the statistics are mind-boggling considering we’re talking about the transaction of a lifetime, -literally. The author, Matthew Halliday states:
““Between 2012 and 2018, the number of businesses who just planned to close outright, rather than sell, tripled, from five per cent to 15 per cent,” says Corinne Pohlmann, senior vice-president of national affairs at CFIB. “What worries us is that they’re not finding buyers, and then their only option may be to shut down.”
Additionally, most entrepreneurs tend to put their businesses on the market long before they are ready – for example, without first bolstering lacklustre financial statements or securing relationships with long-time clients in writing. Few have formal succession plans, Ms. Pohlmann says, and many also tend to let their revenue slip in the years before a sale.
So, in that field of under-prepared businesses, it can be easier to stand out if an entrepreneur has the patience to proceed with the months – or years – of preparation needed beforehand.
The article emphasizes the importance of building the right team FAR in advance of the moment you’re actually hoping to sell. Preparation is key here…. If you do your research in advance and start identifying buyers early on in the process, you stand a MUCH better chance of being able to play multiple bids against each other when the time comes to sell.
Takeaway lesson? Put together your business exit dream team early on in the process, and let them keep the ball rolling and keep you from getting distracted with the day-to-day operations of your business.
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