Have you heard of “Baby Boomers”. Probably it’s a dumb question. Who hasn’t? Maybe you haven’t given much more than a passing thought to this wave of humanity that is now entering the window of retirement. But, if you are an entrepreneur, one of the ranks of the baby boomers seeking to sell your business, you should be aware that the odds are against you. A US Chamber of Commerce study predicts that only 20% of businesses offered for sale will successfully transfer to another owner. Would you like to be part of that 20%? This series of blogs will address 10 actions you can take to assure the sale of your business.
Prepare your business to succeed without you. If your presence is necessary for the business to function, you don’t have anything to sell. The owner must develop the employees such that the business functions well without the owner’s presence. A potential buyer needs to feel confident that the business will continue to operate in a profitable manner while he or she learns the ropes. The E-Myth describes the situation in which a person with great technical skills starts a business that flourishes but then stagnates because the owner can’t make the transition from technician to manager. A business in this condition is likely to be one of the 80% that do NOT successfully transition to a new owner. There are three essentials:
- The owner must clearly assign responsibilities and give appropriate authority for the employee to complete those responsibilities.
- Employees must demonstrate problem solving skills such that intervention by the owner is not required which challenges arise.
- The business much continue to operate profitably during extended absences of the owner and without owner intervention
Sale of your business can not be left to chance. Owners must be intentional in preparing their business to be a marketable commodity. This is the first of 10 tips for building a business that will sell.