Thinking of Selling your Business? You need to think ahead!

| Tuesday September 10

Small Biz Matters – a half hour program each week where you can work ON your business rather than IN it.
with Alexi Boyd from Boyd Office Management Services
Date: 10 September 2019

One aspect of running a small business we should but generally don’t think about is succession planning. We run our business on a day to day level; struggling to think ahead to our so-called 5 year plan (what’s a 5yr plan, I hear you ask). So the thought of thinking about the end is very much a foreign concept. But with a bit of strategic thinking and of course practical strategies we hope today’s show will help you understand the How To rather than the I’m Not Thinking About That Ever in this delicate small business topic.

Michael Kerr is a senior business development strategist,spending a career driving & delivering tangible change for start-ups, large & small corporations, by contributing expertise in business development, business relationship management, project management, commercial evaluation, financial analysis & strategic consulting.

Welcome to the show Michael.

Topics we’ll be covering:

  • What is the outlook for SME owners selling or thinking of selling in the years ahead?
  • Is Business Exit Planning all it’s cracked up to be? What difference does it make to your sale prospects? Can you sell without formal Business Exit Planning?
  • An overview of the different ‘exit options’;
    • Selling with a broker, to
    • DIY, to
    • Selling to staff or competitors, to
    • Bringing in a business partner and exiting in stages
  • Who is buying businesses? And why it is important to understand why they all have different reasons for buying and how you as a seller can use this to your advantage
  • Is it a good time for employers to become employers by buying a business?
  • How do potential business buyers find and buy the right business? Where do you find businesses to buy?

Further notes:

  • The retirement plans of many baby-boomer business owners are at risk from relying on (1) a really outdated process and (2) their traditional, trusted advisors for selling SME's.
  • Most owners will only ever sell one business - easy to understand why it often goes wrong
  • The traditional Business Broking Approach (i.e. list, prepare (minimally only), advertise and wait) has been the default method for owners to sell
  • Owners (and many trusted, traditional but out of date advisors) assume that this approach still works
  • IT might for cafes, retail, hospitality etc businesses BUT not for the hundreds of thousands of other professional, scientific, technical, financial, insurance, IT, manufacturing, wholesale etc businesses
  • The cost to owner’s of not getting out is both;
    • Time - wasted years (i.e. have to stay running the business and putting off post business life plans), and
    • Money - less or no retirement dollars
  • For sale planning Owners need to switch their thinking from months to many years (easily 5 years)
  • And, other than a straight sale Owners need to actively consider and understand alternative ‘exits’;
    • staff buy-outs (and vendor finance),
    • progressive sales (sell down over time),
    • partial sales (sell 1 part of multi-part business)
    • merger’s (1 + 1 = 3 maybe)
    • downsizing (scaling back)
    • employing a General Manager
  • Owners need to be ready for unplanned approaches to merge, to sell


  • Traditional, trusted advisors not necessarily who you need for a sale but often the default advisor
  • Owner’s too busy running the business so ‘outsource’ and/or underinvest in what’s needed to sell well
  • With near full employment and finance constraints who is buying?


  • 2m + small & medium enterprises (private businesses) comprised of;
    • 5-19 employees - 180K
    • 1-4 employees - 560K
    • 0 employees - 1.2M
  • 70% owned by baby boomers (last of whom turned 50 recently)
  • Many (up to 75% by one estimate) plan to sell in next 10 years
  • PWC 2017;
    • 83% still don't have a succession plan
    • &0% of business transfers fail
  • Biggest ‘business for sale’ listing site has only 20K advertised businesses – however a large percentage (over â…”’s) are retail, hospitality, franchise - a small percentage of those businesses

Some ‘insider’ observations

  • Many 0 employee businesses are saleable with preparation
  • Many small businesses don’t have large profits BUT are still valuable and saleable
  • Owner’s need to take more ownership of / role in the sale process
  • Owner’s need to invest in good advice and preparation now for an ROI (comprising an increased prospect for selling, a higher price and a quicker sale timeframe)
  • Owner’s and their advisors will get better outcomes by looking at their own business through the eyes of a buyer
  • Every buyer, if they had to put in an offer based on the same information, would put a different value on any business
  • Small business valuation more art than science
  • The start-up culture (which BTW I think is great) combined with low start up costs does result in some wannabe business owners completely overlooking less glamorous existing businesses as an option for business ownership
  • Owners and advisors completely underestimate how complex and emotionally taxing a business sale is
  • Owners assume micro / small business sales are less complex than medium / bigger business sales - this is completely wrong
  • Too many assume selling a business is like selling a house
  • If I’m a business buyer there are many good opportunities - rather than look at the business for sale listing sites ring Owners directly - you’ll uncover many more good opportunities

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