We live in a time when an aging population has a great influence on our society. Similarly, the number of businesses going up for sale due to the entrepreneur's approaching retirement age is increasing.
Last year the Netherlands was takeover country at its best, with an increase of no less than 55% in the number of takeovers and mergers. Of course, this is by no means always for retirement reasons. But what does it mean for buyer and seller when the business is up for sale because of the owner's age?
It starts with a sales profile
Sometimes early retirement occurs because someone has decided to stop working. This is possible, but most business owners love their work and will often continue to look for new opportunities until retirement. Putting the business up for sale due to reaching retirement age is often an emotional choice.
For years blood, sweat and tears have been put into your own business and then suddenly it is time for retirement. Then putting the business up for sale is an inevitable step, but how do the right buyer and seller find each other? It starts with posting a sales profile, but there are still some things parties should think about.
MBI, MBO or family succession?
The right successor, the seller can come up against this in various ways. Perhaps there is someone in the business itself who would like to take over? If so, a management buyout would be the most obvious.
If, after posting a sales profile, the seller receives responses from interested buyers, it is possible that a passionate company will buy into the business. This is also known as a management buy-in.
The third option is family succession, but this is becoming less common. Not all children are eager to take over businesses from their parents.
Sell a business due to retirement
If you are a potential seller, it is good to think about a number of things before putting the business up for sale. Realize that the business has been your whole life for many years and that an era is now coming when you have time for other things. Good preparation is half the battle, but it will also help you get through the process emotionally.
Here are the three main points to consider:
- Have a valuation performed so you have a good starting position for an asking price;
- Hire an acquisition specialist for the things you cannot or do not want to do yourself;
- Think about what you will do with your life after "the business," so you don't end up in a black hole.
