Business for Sale as Baby Boomers Exit

By 25/01/2019Uncategorised

We are entering exciting times in which there are many businesses for sale around the world, with many more likely to soon come onto the market. One of the main reasons for this surge in businesses for sale is that the famous ‘Baby Boomer’ generation (people born between 1946 and 1964) is starting to retire in very large numbers. In many cases, these Baby Boomers built businesses over the course of their professional lives, and now a large number of these businesses are coming up for sale.

When it comes to purchasing a business of any kind, there are numerous considerations you should keep in mind throughout the process. This is in part to ensure you don’t get caught out anywhere along the way and to enable you to make the right decisions for you and your business targets, purchasing the business that works best for you.

Good News for Business Buyers

If you are looking to buy a business, be it a thriving one or otherwise, you may never have a better opportunity than over the coming years. An amazing variety of businesses are hitting the market-place, covering almost every imaginable industry and varying greatly in shape, size and nature. While the key factor behind the sale of many businesses is that the owner or director is retiring, that doesn’t automatically mean the business is healthy. One has to remain vigilant to ensure one doesn’t purchase a business ‘beyond salvation.’


The Business Cycle

Most experts agree that small and medium sized businesses follow a 6-step cycle, which can be loosely summarised as:

  1. Set-up
  2. Survival
  3. Growth
  4. Consolidation
  5. Expansion
  6. Decline

Business owners need to be aware of where they and their business sit in the cycle, as each stage requires specific and varying actions; the same applies to people buying a thriving business. Businesses at different stages may also command different fees and prices, so paying attention to this is key.

Where Does the Business Fit in?

The difference for buyers of thriving businesses, as opposed to those starting up a new venture from scratch, is that you will arrive in the middle of the business cycle, and you will need to quite quickly and accurately determine where the business in question actually fits in to the established Business Cycle.

Set-up, Growth and initial Survival will certainly have passed by this point. However, is the business in a Consolidation or an Expansion phase, or, more ominously, is it in the Declining stage?

If the business is still growing, then it is an easy decision to proceed with a purchase, with the right potential being present. However, such a business will demand a higher price which may be too expensive, whereas a business in decline will be more affordable, albeit with the potential for more ‘baggage.’

key-business-decisionMaking the Key Decisions

That the business for sale is no longer growing, is the most common scenario.

What a potential buyer has to consider is: On the one hand, the current owner has been involved in the business for sale, likely for a number of years and knows the business inside out. If the current owner can’t manage to further grow the business, what chance do I [the buyer] have?

On the other hand, the current owner has been involved for years and so for that very reason, may be used to viewing the business a certain way, and may be getting tired. I [as the potential new business owner] can bring new enthusiasm and a fresh perspective which could be the key to turning things around.

If you believe that buying a thriving business, rather than starting from scratch, is right for you, then your timing couldn’t be better. If you are careful to identify a business that fits your experience, your skill-set, and of course, your bank balance, then now may indeed be an opportune time for you to act and capture the right business for you.

Get Advice to Buy a Business

If buying a thriving business is the path you are thinking of following, increase your chances of success by taking expert advice early on in the process. Contact Advice to Buy today.

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