Earlier this year, an article in Canadian Business highlighted the pending acceleration in company transitions, as baby boomer owners begin to retire at a record pace.
Those owners are now being forced to market by health concerns or a lack of successors within their businesses.
That could set the stage for the biggest intergenerational transfer of companies Canada has ever seen, as gen-Xers and millennials buy out the boomers.
While a boom in business sales is predicted throughout Canada, there are still many that are cautious about beginning the exit planning process. This is unfortunate for a number of reasons, chief of which is that most business owners have not saved enough capital to retire on.
A report published by the Canadian Federation of Independent Businesses in 2014 emphasised that more than three-quarters of small business owners didn’t have plans in place for their retirement. This is in accordance with statistics from earlier in the year that a large percentage of older individuals are not leaving enough funds to maintain the lifestyle post retirement.
Consequently, many small business owners are retaining ownership of their companies until well into their late 60s and 70s, due to the risk inherent in relying on its value to finance retirement. Others are actually selling without considering this risk whatsoever, which can be even more devastating. Fred Dodd’s article in Atlantic Business Magazine reported that the majority of SME (small-to-medium enterprises) owners believe their business is worth twice what it actually is.
Can a business owner adequately prepare for retirement without a clear understanding of their company’s valuation? In a word, no. That is why it is essential to have plans in place for their succession using professional M&A advice. This is where Generational Equity can provide much-needed support.
Our proven process begins with a thorough, comprehensive evaluation of the business. This allows the business owners understand the current business enterprise value of the company and put measures in place to increase its value if necessary. Only through these steps to determine the current market value can an owner make an informed decision regarding when to sell for the most profit.
Above all, don’t allow yourself to fall into the trap of not knowing the true value of your business. Without a full knowledge of its valuation, selling is a definite risk, one that may prove ruinous to your future.
To find out more about planning your exit strategy, you can attend one of our complimentary workshops.
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.Robert Evans, President and CEO of Mealtracker Dietary Software
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.Michael J Polarek, President, Paragon Packaging
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!Andy Graham, Vice President, Modern Heating & Plumbing
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.Larry Moore, Owner, A Company Portable Restrooms
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.Karen S. Williams, CFO, BW Manufacturing
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Terry D. Wickman, President, Keytroller
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.Terry D. Wickman, President, Keytroller
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.Robert Evans, President and CEO of Mealtracker Dietary Software
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”Karen S. Williams, CFO, BW Manufacturing
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.Pete L.
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.Andy Graham, Vice President, Modern Heating & Plumbing
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.Michael J Polarek, President, Paragon Packaging
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