Many business owners have the vast majority of their net worth tied up in the business, according to a study by the U.S. Small Business Administration. Whether they are able to retire comfortably after a lifetime of hard work will depend on how carefully they create (and follow) their exit strategy. Those who plan to retire soon, or even years from now, need to take specific steps to assure they receive the maximum value for the enterprise they have created. Failing to do so can be a costly mistake.
According to the Pew Research Center, more than 3.5 million baby boomers will turn 65 this year. While the study also shows that boomers don’t believe old age begins before 72, the aging boomer population is leading to a dramatic increase in the number of business owners seeking buyers for their companies. Now may be the best time to sell given the exponential growth in baby boomer business owner retirement over the next 15 years.
“Selling a business for an optimal value begins with a process that many business owners have been too busy to think about,” said Carl Doerksen, of Generational Equity, a firm that specializes in the valuation and marketing of companies valued at between $1 and $150 million. “Those who must suddenly sell due to health issues or other events will often fail to recognize the full value of the enterprise they have created.”
Generational Equity offers executive conferences for business owners that illustrate the multi-step process necessary to maximize a company’s sales potential and price.
Getting the books in order is step one. This includes recasting earnings to reflect the true financials of the business without one-time expenses or costs and other items not relating to the ongoing operation of the company. For example, a new owner won’t be paying the lease on the former owner’s company car, his or her country club dues or hire non-essential relatives or friends. Recasting earnings can add thousands of dollars to the businesses valuation.
“Professional M&A advisors can also help identify intangible assets that don’t appear on the books but will draw the interest of potential buyers. The length of service and quality of your employees as well as long-term relationships with major customers have real value that buyers may pay for,” says Doerksen. “Why sell to an acquirer who is unwilling to pay a premium for your business?”
Generational Equity often identifies multiple potential buyers for a business. “Equity firms with portfolio companies that have synergies with your business may find your company attractive,” says Doerksen. “Foreign companies that have or desire an expanded U.S. presence in your industry may be attracted as well. Even retired CEOs with a high net worth who are interested in staying active are potential candidates.
“So the goal is not just to identify a single potential buyer,” says Doerksen, “but rather create an auction among several potential buyers and if interest rates continue to rise, identify buyers for whom this is less of an impact.”
If you have questions or are interested in learning more, contact Generational Equity at 1-972-232-1121 or send an email here.
The information we learn from customers helps us personalize and continually improve your experience at gencm.com. Here are the types of information we gather.
Information You Give Us: We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice. Our computer system protects personal information using advanced firewall technology.
Information from Other Sources: For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Capital Markets LLC may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Capital Markets, L.L.C. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Capital Markets LLC at is office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
INFORMATION ON THIS WEB SITE IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Capital Markets may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Capital Markets does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Capital Markets will be deemed NOT to be confidential. By sending Generational Capital Markets any information or material, you grant Generational Capital Markets an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Capital Markets is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Information Generational Capital Markets publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Capital Markets intends to announce such products, programs or services in your country. Consult a Generational Capital Markets representative for information regarding the products, programs and services which may be available to you.
Generational Capital Markets makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Capital Markets web site, please understand that it is independent from Generational Capital Markets, and that Generational Capital Markets has no control over the content on that web site. In addition, a link to a non-Generational Capital Markets web site does not mean that Generational Capital Markets endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Capital Markets BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Capital Markets.
Honored to win Investment Banking Firm of the Year 2 years running.
Over 50 awards and counting.
Sign up to receive regular email updates, industry-leading insights and details on complimentary M&A executive conferences in your area from our award-winning team
Success, you have been added to our list.