Who will Buy Your Business?

When You Want to Sell, Who Will Have the Money to Buy?

Let’s talk about money a moment.  71% of Americans say they have a savings account; but, 56% report a balance of $5000 or less. 33% of our population report savings balances less than $1,000, according to the RESEARCH story by Maurie Backman, published September 10, 2020.  These savings balances are not inspiring, are they?  Let’s look then at another measure of personal financial health, Net Worth.

Net Worth is what a family has left over after all debt has been paid off: credit cards, student loans, car loans, home mortgages, etc. or, what they “own”, less everything that they “owe.”  From the Federal Reserve's 2019 Survey of Consumer Finances, here are the stats for the median net worth by age:

Under30	$  7,512
30 - 34	$ 35,112
35 – 39	$ 55,519
40 - 44	$127,345
45 - 49	$164,197
50 - 54	$171,320

It must be noted that most net worth is tied up in home value, meaning it’s not easily accessed for other uses, like buying your business.  So, now we’re back to repeating our opening question, “When you want to sell, who will have the money to buy?”  We expect you’re thinking, “Not many!”  And, you’re absolutely correct. Even the few who do have meaningful funds available or access to credit are retired or nearing it and have no desire to make the time commitment or take on the risks of business ownership.   Does it seem like we’ve eliminated just about every buyer option?  The answer is, yes, if we require substantial money upfront. Fortunately, there’s still a very large pool of passionate and persevering talent that is capable of learning and earning their way to ownership, over time, just as you likely did.  Once you realize that you’re not likely to get a “big check” and walk away, only one very large obstacle to a successful exit remains.  It’s you, by not developing your buyer(s) and neglecting to plan.

Recruiting, developing, compensating, and retaining talent is an owner’s highest priority.  When your process for growing talent is well executed, not only will your operation yield more consistent results, you’ll likely be more profitable, your business will be more valuable to a successor owner, and your buyer(s) could already be on a multi-year path, as your partner, to ultimately carry on your legacy. Think about this concept.  Who is more committed to employment longevity and the success of your business, an employee or a partner?

Partners share in the risks and rewards of business operation.  Find a way for all of your employees to become partners with you, either in fact or at least in practice. Working beside you, rather than for you, creates a dramatic, positive, and dynamic shift in staff sentiment and commitment.  Try it.  You’ll like it!

Make the transformation to a Perpetual Business. We have tools and resources to help you https://perpetualbusiness.co/