As the Baby Boomers continue to enter
retirement, our economy faces one of the most dramatic demographic shifts in
history. A sellers’ market
and an aging baby-boomer population is causing many entrepreneurs to consider
exiting.
Many business owners wait until
retirement to sell, and as baby boomers are getting older, the numbers of
businesses for sale is rising. In fact, 57% of business owners identify their
age as the main motivation for considering a sale. Over 30% of all business
owners in BC are already over the age of 60.
“There’s a whole generation of owners that will need to convert their
businesses into cash,” says Michael Naprawa, President of BC Business Brokers,
a Vancouver Island-based business brokerage firm. Fortunately for business owners, the market
is ripe. Mergers and acquisitions is a
cyclical industry, and we're in one of the largest sellers' markets that has
ever occurred. The current combination of low interest rates and favourable
capital gains taxes is making it easier to acquire than grow organically, which
means buyers are eager.
Yet business owners tend to procrastinate during the
good cycles. According to a recent survey of business owners, 35% held off from
selling their business because they anticipated continued growth. Unfortunately,
waiting too long is probably the single biggest factor in reducing the proceeds
from the sale of a privately held business.What the majority of business owners don’t realize is
that you can’t outgrow interest rates, and you can’t outgrow capital gains. The
time to sell is when the market is flush with buyers – and the market is flush
now.
If you are interested in selling your business and would like more
information, contact our Nanaimo office at 250-751-7917 or 1-877-289-0969 or
email us at nanaimo@sunbeltnetwork.com.
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