The Calm Before the Storm: Where do You Want to Be in Two Years?

Let me start by saying that I don’t have a crystal ball. The word on the street is that tough times are coming, and the glory days of a fat market will indeed come to an end. Of course, the pundits have been telling us that for a while so what’s a business owner to do? Sit, grow, sell, buy more? At some point, every business owner wants to transition out, and in fact, everyone must since we can’t live forever.

The magic is doing it at the right time. Part of that is just luck – we’ve all heard of companies getting above a top dollar for their company only to have a bubble burst on the new owner a couple of years later.

Here’s the rub. Now is prime selling time for many industries – especially here in the Northeast. Multiples are at almost record levels; interest rates are very low, and businesses are growing. Savvy buyers are in stealth waiting mode: they want the downturn so they can capitalize on someone else’s misfortune. It’s not a bad thing, it’s just business.  

“If you are a Boomer business owner, the procrastination needs to stop. You never truly know what is going to drive your decision to sell and being prepared is not only smart business, it will reduce your stress level immensely.”

 
Now let’s talk about the famed Baby Boomers. The exodus of people ages 55-72 has begun and will only escalate over the next decade. Adding another dimension to this process is the mindset of many Boomers – Do I work until I can’t? Do I sell now? What should I do? Many in the boomer age bracket haven’t planned and retirement snuck upon them… then something happens which puts them in “I need to sell NOW” crisis mode.

Most family-owned businesses will change hands over the next 5 years. Reasons leading the pack are retirement, health, and burnout. Their children aren’t following in mom & dad’s footsteps, leaving many of these family-owned businesses being acquired or merged.