Baby Boomers Not Able to Sell Businesses

Experts are warning small business owners to be prepared for the expected flood of businesses for sale over the next few years as baby boomers look forward to retiring. Over 400,000 small businesses are likely to change hands within 5 years.

The impact is expected to be significant as SME’s hoping to cash in their business for superannuation will find the competition fierce with more sellers than buyers available.

Wes Hindmarsh and Mike Hasler at Hindmarsh McDonald have recently conducted a number of workshops on business succession. The lack of readiness for this major event has been alarming. Few participants had taken out wills or insurance, most had no ideas on the benefits of the recent small business concessions legislated by government, superannuation had not factored into many retirement plans, little estate or tax planning had been considered and the stories of partnership problems, death, divorce and ill health confirmed for us that planning needs to start much earlier and should not occur in the latter stages of a business life. Our workshops were indeed timely for one business owner who is poised to save over $500,000 following our advice.

According to a recent CPA survey on business succession “only the better performing businesses will have a ready market and owners hoping to retire may find their hopes dashed on when they can actually afford to retire”.

Planning for exiting your business is now even more important than ever. It is time to put in place a proper Business Transition or Succession Plan which sets out the actions and goals necessary to improve your business performance to make it more attractive to the limited potential purchasers and to shore up family matters and clarify the future of the business for key staff and other interested stakeholders. Businesses focusing on continuity after the retirement of the current owners will be in a better position to attract the right buyer.

Hindmarsh McDonald has developed a series of business diagnostics and planning tools to assist in making the transition to retirement as rewarding as possible. Please contact Mike Hasler in the office on 4421 4811 to make an obligation free appointment to discuss your needs.