Recent studies show that 75% of boomers will exit their businesses within the next 10 years, 50% within 5 years.
“According to CIBC, an estimated $1.9 trillion in business assets are poised to change hands in five years — the biggest transfer of Canadian business control on record.” [1]
The increasing supply of businesses for sale over this time period will put tremendous downward pressure on sale prices.
More than half of small to medium-sized business owners in Canada do not have a succession plan and many more do not have one formalized. Without a proper plan, business owners will find themselves selling at a significant discount to those that come to market prepared.
Effective pre-sale planning involves preparing the business and the business owner for a sale or transition and will make the difference between selling for a discount or premium to average industry multiples.
Whether business owners are planning an external sale or an internal transfer, building a business for a successful transition takes time and must begin 3 to 5 years in advance.
A common goal amongst business owners is to maximize the net proceeds on sale. In order to do so, a business owner must:
a) Maximize value/sale price; and
b) Minimize disposition costs (e.g. taxes, transaction costs and other liabilities).
On December 4, 2012, we are hosting a morning session for business owners to provide vital information to assist with a) above.
Join us in Markham, ON, the morning of December 4, 2012 to learn valuable information needed to understand the critical aspects of valuation, value enhancement and pre-sale planning, as they relate to building a business for a successful transition.
For further details and registration information, please visit us at http://vspltd.ca/events/
Please pass this along to any business owner clients, colleagues or contacts you have. They will thank you for it.
I look forward to seeing you there.
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1. Ottawa Citizen, November 13, 2012