Waiting to Sell? Don’t Wait Too Long…

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.

Casting or Recasting - What's the Difference?

Definitions of Casting. 1. The art of throwing a fishing line out over the water by means of a rod and reel. 2. The act or process of choosing actors.

Operating your own business may seem frightfully similar to either one of the above definitions! However, when it comes to valuing your business for sale purposes, there is a type of casting that is crucial. Recasting.

What “recasting” the financial statements does is:

• Provide a clear indication of the business value to help the owner form accurate expectations
• Allow for owner benefits such as salary, perks, and discretionary expenses to be added back into the value of the business so a future buyer can accurately assess its cash flow and future earning capacity.
• Enable buyers to make meaningful comparisons with other investment opportunities.

Recasting is one of many services provided by BC Business Brokers. We assist business owners in understanding financial statements so they can move forward with the completion of the business sale. We also bring qualified buyers to the table and assist them in finding the right business for their background, lifestyle and financial goals. Because selling a business is pivotal on its asking price, the consultants at BC Business Brokers are trained to perform an analysis of financial statements to calculate a range for the “Most Probable Selling Price” (MPSP) of the business. This range is what the current market will typically support.

BC Business Brokers provides outstanding resources, expertise and people who are dedicated to the success of its clients. And if you’re lucky, your business broker may even take you fishing… with a rod and reel that is! You are welcome to visit our local website http://www.bcbusinessbroker.ca/, or the international website www.sunbeltnetwork.com/vancouverisland. Feel free to contact us direct at 250-751-7917 or 1-877-289-0969 to learn more about what our business specialists can do for you.