3 Ways to Maximize Your Sale Price when Baby Boomer Businesses Flood the Market
By Andy Kocemba
Baby Boomer business owners: Remember 2008?
Things were going pretty well, right? Your business was running smoothly, the economy was chugging along, and you probably had your sights set on your upcoming retirement plans.
Then, the recession hit, and things took a bit of a tumble.
Now, here we are, approaching 10 years later. The economy has been built back up, and hopefully, your retirement accounts have been, too. If so, it might be time to start thinking about retirement again, and that often means selling your business.
But, what about all the other Baby Boomers who have postponed bringing their businesses to the market just like you? How can you stand out and get a premium price when you sell your company?
The good news is that while there might be more businesses hitting the market in the coming years, the principles of value still apply. If you can maximize basic value drivers, your business will stand out from the pack, allowing you to command a premium sale price.
Here are three things to think about in particular:
1. Cash is still king
Just because there will be more businesses on the market doesn’t mean all of them will actually sell.
As has always been true, the businesses that show strong profitability attract interested buyers, plain and simple. Begin taking steps today to ensure that your company is maximizing profitability and that your books and records clearly demonstrate this.
2. Curb appeal is not just for houses
Clean things up. If a potential buyer for your business is looking at a few different purchase options, make yours sparkle.
This means that you need to get your systems and processes documented and in order, as well as ensuring your physical facility is cleaned up and running smoothly. A buyer should leave a showing confident that your business is well-run and could be easily transferred to a new owner.
3. Prepare for the give and take of deal-making
As a deal to sell your business starts to take shape, remember not to take things too personally. Use the buyer’s desires as a way to also get what you want.
If the price is your main objective, perhaps you are flexible and give them the closing date they prefer. If there is a point a buyer must have, use that as an opportunity to get what you want or to commit the buyer to your business.
Don’t be overwhelmed by the thought of Baby Boomer-owned businesses coming to the market in one great wave.
While the laws of supply and demand might hint that a buyer’s market scenario would drive prices down, I believe this assumes all businesses are equal. They aren’t.
If you work to make your business stand above the rest, I know the coming years will be a great time to sell your company.
Andy Kocemba is president and co-owner of Calhoun Cos., a top business brokerage firm in the Upper Midwest. Calhoun Cos. has been connecting buyers and sellers since 1908, working with small- to medium-sized businesses across all industries. A graduate from Bethel University, Kocemba joined Calhoun Cos. in 2003 as a sales agent before buying the business in 2011. He is a member of the International Business Brokers Association, Minnesota Chamber of Commerce, and Better Business Bureau.