The average age at which entrepreneurs sell a business has dropped significantly over the past decade. The most common age of selling entrepreneurs is currently 55. In 2005, it was 60.
This is one of the results of the Brookz Takeover Barometer, the periodic research of takeover platform Brookz, on figures and trends in the takeover market. The survey was conducted among 128 merger & acquisition advisory firms (approx. 500 advisers) that together represent more than 80 percent of the SME takeover market (businesses with revenues between 1 and 30 million euros).
Reasons for sales
Although more and more entrepreneurs are selling their business before age 50, age - combined with lack of succession - still remains the most important reason for sell a business (43%). Other reasons cited for sell a business include: focus on new activities (17%), cashing out (15%), understanding that the business is ready for a new type of manager (15%) and personal circumstances such as illness, divorce, etc. (10%).
According to Peter Rikhof, editor-in-chief of Brookz, the lower average age of selling entrepreneurs fits into a structural development within the takeover market. "Due to rapid technological developments, the life cycle of many businesses has become a lot shorter. As a result, businesses are being sold faster and earlier. In addition, unlike the baby boomers, the new generation of entrepreneurs is much more open to an early exit. Retirement is still far away and succession within the family is no longer an issue. Many of these entrepreneurs simply start over after selling their business.'
Outlook
Although growth in the SME takeover market flattened slightly in the first quarter, the outlook for the rest of 2015 is still positive. A large majority of acquisition advisory firms (68%) expect that the SME acquisition market will be able to maintain its current high level of activity over the next six months as well. Thirty percent of advisers even expect the acquisition market to pick up even further in the next 6 months
Report grade
Expressed in a report grade, takeover advisory firms give the takeover climate in the second quarter of 2015 an average of 6.8. For the expected takeover climate in the next6 months, respondents gave an average rating of 7.1.
