...there are three big problems ahead.
ORANGE, Calif. (PRWEB) August 06, 2018
Planning ahead is key for business owners, and it has never been more important as the largest group of business owners in the history of all time – Baby Boomers, born between 1946 and 1964 (and now ages 54 to 72) – gets ready to retire.
According to certified exit planner, author, radio and podcast host and professional speaker Bill Black, who has been helping business owners plan for succession, exit and transition issues since 1983, "there are three big problems ahead".
“First, according to Business Enterprise Institute's recent Business Owner survey, not enough younger buyers (behind the baby boomers) are interested in many of the types of businesses that were started by the Boomers. A lot of industries have been displaced, but even more pertinent is that a lot of new industries have been created. It means there will be less buyers interested in many types of businesses, and many small and medium size business owners who try to sell will find it very difficult to do so,” said Black, who owns Exit & Retirement Strategies, Inc. and has interviewed over 1,000 top business advisors and authors on The Exit Coach Radio Show (a daily podcast on iTunes and other platforms).
“Second, right now, per BizBuySell, approximately 53% of the estimated 15,000,000 US businesses are owned by Baby Boomers (let's call that 7.5 million businesses). Moreover, in their study, they indicate that 60% of those owners plan to sell in the next few years (that's approximately 4.5 million owners). Given that, per Dealogic, the current Business sale market supports approximately 100,000 business sales per year, even those that are mathematically challenged can deduce that over the next 10 years we will have a staggering increase in the number of baby boomer business owners looking for buyers, far surpassing the number of deals completed right now", Black says.
What will that do to the law of supply and demand for transactions? "Drive down valuations overall and significantly increase the time it takes to find a buyer. In the next several years we expect the number of businesses up for sale to triple, due in part to the aging population and also due to a pent-up demand from the prolonged recession that started in 2008", according to Black. He continues, "Third, if we add in the projections in the next decade by groups I have interviewed such as ITR Economics about the potential for a financial crisis in 2030 when the economy is on a path to be stretched thin by nearly 77 million baby boomers all receiving Social Security checks, among other age-related issues, and it points to a lot more Boomers being motivated to exit in the mid 2020's. Put it all together and we have a potential planning nightmare on our hands.”
According to Business Enterprise Institute in a recent survey of business owners, the pendulum has shifted so that the vast majority of businesses owners are expecting to rely on an “insider transition” – a sale to a key employee or family member or members. “To be successful, they need to start identifying and preparing their successor owners now,” said Black. “With so many owners planning to rely on key employees or family members, getting them prepared and locking in a plan early will be key. There are several strategies and techniques that I will discuss during the webinar that owners can employ to get their successors dialed in to start learning how to act and think like owners.”
Black’s live webinar, “Succession Success: How to Get Your Future Leaders on the Path to VP & CEO,” will air on September 5, 2018 at 10 a.m. PT/1 p.m. ET. Those who register in advance can watch the recorded webinar anytime.
According to the BNY Mellon 2017 study on "Owner Readiness", most business owners are woefully unprepared in a few key planning areas, with 83% of the surveyed business owners indicating they agreed with this statement: “Having a transition strategy is important for my future as well as the future of the business", yet 88% said they had no written transition plan. "Less than 20% of owners have done significant planning, and their families and employees are at risk,” said Black. He continues, "I present frequently to business owner groups about preparing for their futures. This webinar will help attendees understand the reasons most family businesses fail in the second generation, learn how to gauge whether the next generation is keen to lead, and establish clear planning priorities."
The webinar is being presented to members of Vistage Worldwide's Family Business Network, the largest CEO peer group in the world with over 22,000 CEO members who pay hefty dues and enjoy valuable content as they meet monthly to work on their business issues in a private setting. However, by special arrangement, this webinar is available at no cost to anyone who signs up via this link: http://familybusinesswebinar.com
For more information or to listen to Black’s daily podcast interviews and search a directory of past interviews, visit: https://ExitCoachRadio.com.