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Why Baby Boomer Business Owners Fail to Plan Their Business Exits

In working as a consultant to Baby Boomer business owners who want to sell, I often have people say to me, “Heath, I only wish I had started thinking about selling years ago.”

What they are saying essentially is that “Proper planning prevents poor performance.” Nowhere is this cliché truer than in the world of business exit planning.

The fact is: the majority of baby boomer business owners never take the time to plan for the inevitable day when they will want or need to leave their businesses. These successful business owners come up with every imaginable excuse to avoid this strategic imperative.

The net result of neglecting business exit planning, of course, is that when the time comes to leave (and it will come, no matter what you want) sellers are backed up against a wall and forced to make hasty decisions. These decisions seldom result in the most favorable outcome for the seller and create a lot of unnecessary stress and heartache.

Often, the same issues that make it difficult to discuss things such as funeral planning and life insurance creep into discussions of business exit planning. To some people, thinking about exiting a business is akin to thinking about death- the last great taboo in American society.

Boomer owners also fail to plan to exit their businesses due to inaccurate assumptions such as believing that a spouse, significant owner, child or grandchild will automatically take over the business, or that they can sell the business to their employees when the time comes.

Owners also assume that the personal estate planning they have done will factor in the issues related to their business. While the two things are certainly connected, the strategies for achieving success are quite different.

Your estate planning attorney may be exceptionally competent at keeping as much of your estate out of Uncle Sam’s hands as possible but he or she may know little to nothing about how to guide a successful business sale and create a lifetime stream of income in the process. It pays to have an acquisition expert on your team to create a separate and distinct plan for selling your business.

Another reason for procrastination in planning business exits is that the entire procedure seems overwhelmingly complex. Most business owners are experts at running their businesses, but they realize they haven’t a clue about how to successfully sell one.

Often times, owners approaching retirement realize they need to do something, so they read articles, listen to business experts, watch videos and… get very depressed.

An owner quickly concludes that selling a business in today’s economy is extremely complex. They take one look at their disorganized office and messy, incomplete financials, their neglected infrastructure and lack of systems and procedures, and become discouraged, with no clue where to even begin.

I am guessing the feelings are something like those of a housecleaner hired to clean a 50 room mansion that hasn’t been cleaned in 10 years.

Business exit planning doesn’t have to be this way, though. With a little help from some trusted mentors, you can start planning now and avoid most, if not all, of the mistakes other owners make when leaving their businesses.

Imagine, having a blueprint in your hands months, even years before your exit; a map of exactly what you need to do to achieve a transition that is simpler, faster, and more lucrative.

Imagine having a trusted expert’s guidance, someone who does the best job possible for you because he or she does not work on commissions and is totally versed in the procedures for successfully selling a business.

Only around 3% of businesses on the market sell successfully. Wouldn’t it be nice if you had a way to increase your odds of selling dramatically, and decrease the amount of time your business is on the market?

If you could sell your profitable business for more money, in less time, with a lot less stress, and create a stream of income for retirement that you could not outlive, is there any reason you would not want to do so?

There is a way to do all these things and more if you have the right guidance from seasoned professionals who can help you put together a realistic, workable exit plan.

Consultants and acquisitions experts know that you cannot overstate the importance of having a such plan in place before deciding to sell. This is especially true for Baby Boomer owners who are within 2-5 years of retirement, whether or not you plan on leaving the business to a family member.

An even better idea is if you build your company with a view to selling it from the get-go. After all, a business exit blueprint isn’t set in stone, it’s an organic part of your strategic planning process that can be changed and amended as your needs and desires change.

The most important thing is that you need to start.

To help you get started creating the perfect business exit strategy, Delta has produced a comprehensive check list you can use as a guideline. This list will do a lot to help you start putting together the resources you need in order to write your plan.

You can download it at our website or you can call Delta’s office M-F (Central time) to request a copy. (210) 369-4161.

If you have any questions or need help, please reach out to us either through email or by phone.

Checklist For Organizing Your Internet Home Business

Great! You’ve decided to start your own Internet home business and you are counting the money, in your head, that’s falling from the proverbial Internet money tree. But, before jumping into your new home based business there are some basic items that you must take care of first.

1. Remember, “This is a business”! Don’t make the mistake of thinking that you do not have to do any work. Some people look to start an Internet home based business but fall victim to promotional products that promise massive wealth from an Internet home business with no effort on their part. Don’t be this person.

You already have passion for a product or a service you want to provide. Or, maybe you don’t have passion but see a potential to make extra income. In either case you have to put forth the effort and work consistently.

This is a long-term venture that can, and will, provide a healthy flow of income if approached and built correctly. This is not a get rich quick proposition. If you are determined to build your Internet business read on. The information here will provide some basics to help build your foundation and execute your plan of action.

2. Pick a quiet location and set a schedule to work on your business. It’s not going to get done on its own. In the beginning you’ll have to put in the most hours but once you’re set up it should get easier.

If you are still working another full-time job then set a schedule during your off hours. Involve your family in your plans. Let them know what you’re doing and that you should not be disturbed during business hours. Make sure you have a set goal when you start working. Are you writing, researching, or still organizing?

3. Research and learn as much as you can about your niche (product or service). Is there a demand? A Google search query can answer that question. Just type in your product or service on the browser’s search bar and look at the amount of results you get.

Look at some of the results (sites listed on results page), and then start asking yourself some questions. What are others writing about it? How are they structuring their message? How would you like to structure your message? What can you point out that’s missing in the message of others? In other words, how are you going to be different from the rest?

4. While doing research stay focused on your topic of interest. There’s a lot of information on the Internet and it’s easy to be distracted. One way to stay focused is to search keywords or keyword phrases that fit your niche.

Keywords describe the topic of your product or service. A keyword is a single word related to your niche and a keyword phrase is a group of words that focus on specifics of your niche.

For example, business is a niche word and Internet home business is a keyword phrase. Google’s keyword tool is a good place to start your search and gather information related to your keyword or keyword phrase. (Note: Keyword Planner has replaced Google’s Keyword Tool. To access the tool create an AdWords account, it’s still free to use.)

This will also give you a perspective on how you want to spin your message. Making it easier to structure what you want to say and how you want to say it. Make good use of this information; don’t let all this research go to waste.

5. Be organized with your files. I’ve been there and done it too. I’ve gathered information from several sources with the intention of referencing them later and, unfortunately, I didn’t save it in a central location. When it came time to use the data, I couldn’t find it or it took a long time to find.

Here’s how to avoid this. Right click anywhere on your desktop and create a “new folder” named after your project. For example, if you want to do Affiliate marketing you would label your folder “Internet Home Business Affiliate Marketing,” or something similar or shorter. Just make sure that you pick a name that will help remind you what’s in the folder.

If you are collecting Internet tools to help you create a product you can have a separate folder or a folder within your “Internet Home Business” folder labeled “My Internet Home Business Resource Tools.” The same goes for Internet home business eBooks etc…

6. Create a folder for Internet marketing even if this is not your topic. The really big picture that underlines the Internet is that anyone with access can create a website and promote their vision or communicate their thoughts. And, no matter what your passions or ideas are you can turn them into a business as long as there is a demand.

Unfortunately, a lot of people believe that as long as they create a website people will come. Remember earlier I said there is a lot of information on the Internet. All the sites that promote similar products or service are all fighting to get the attention of the same readers. It’s the same for any business that’s online or offline. You have to learn to market your site and get it to stand out.

That means your file folder is going to get bigger. Do your research on Internet marketing for home-based business. Once you have your site set up it becomes the engine of your business. The fuel that keeps it moving is your marketing. You have to understand it, learn it, and apply it. You’ll feel better when you do.

7. Do the same file set up with your browser. Go to your favorite browser’s bookmark menu and create a folder with similar labels. Again, this keeps your information centralized and if you need to segment them you can do so within the folder.

For example, you can create a folder labeled “My Internet Home Business” and bookmark sites that provide information on your keyword or keyword phrase. Within this folder you can have another folder labeled “Internet Marketing” and so on.

You can bookmark your pages on social bookmarks managers. There are many to choose from, Google Bookmarks and Delicious are very popular. You can use these sites for information backup purposes as well. Still, keeping the information on your browser is simple, accessible and easy to manage.

8. Create an idea file. This is just a document where you jot down your thoughts and good ideas that don’t fit into your current topic. And, where will you file this document? That’s right, your “Internet Home Business” folder.

How many times have you found yourself working on a project when something you just did sparks a new idea? So you say to yourself, “I’ll keep that thought in mind for later,” but when you try to recall it you can’t remember. You know it was a good idea because you still have the same good feeling about it but the visual is gone.

By writing it down in your idea file you’ll have the syntax, not only for your written words, but to retrieve your memories. You never know, it could be the next big idea.

9. One more very important thing that you must always apply. This very crucial component will allow you to keep your sanity and reduce your stress. The one thing I am talking about is to maintain a positive attitude. I know it sounds like a no-brainer but many people lose their motivation or quit out of frustration.

Remember this is a business, and like any other business out there, they come with good days and bad days. If you have done your research and formulated a plan then you have a road map to success.

If you are persistent and see yourself moving forward then this is a reason to be up beat and motivated. When people become frustrated and quit that’s because they didn’t do their research and planning. Sometimes, granted, it’s hard to stay positive.

During those periods it’s best to take a break and do something that is not related to your business. This gives you the opportunity to reflect on the problem or concern subconsciously. Maybe it’s something you are overlooking but can fix easily.

Maybe there is nothing you can do about it and should look at other options. In either case, step back relax your mind by spending time away from the business, not too long, and do something pleasurable.

Running a successful home based business means that you’ll always be looking for ways to improve in order to grow. That means having continuous scheduled time to work and review your plan of action, research your market niche, educate yourself, and apply changes when needed.

Nonetheless, without organization you don’t’ have the basic foundation upon which to build. So start putting your Internet home business in order and everything after that becomes easier to manage.

What Baby Boomers Must Know Before Hiring Someone to Help Them Sell Their Businesses

If you’ve been in business for any length of time, you’ve certainly earned your right to a healthy dose of skepticism. Most business owners have endured more than their fair share of eye-glazing, brain-numbing sales pitches and vendor-sponsored events. They’ve been pushed to try numerous products, procedures, and systems; many of which have failed to deliver anything but mediocre results.

That’s why, even though you might be near retirement and more than ready to start the process of selling your business, solutions presented to you that promise a better, more financially lucrative, and less stressful way of doing so might you on the immediate defensive.

“Too good to be true.” “Heard it before.” “If this works so well, then why doesn’t everyone do it this way?” are a few of the familiar, yet understandable, responses that Baby Boomer business owners give when urged to look into alternative selling strategies.

Business owners over 50 are looking to sell their businesses without encountering adverse tax consequences and without having to pay commissions and unnecessary fees. They also want to sell within a more reasonable time frame than is usual and they want the fairest price for the business.

Perhaps most importantly, sellers fear outliving the proceeds from the sale of their businesses and seek a way they can create a lifetime income which they cannot outlive.

These are concerns which, unfortunately, the old school method of selling a business is simply unable to address.

Pre-retiree business owners are slowly coming to grips with the consequences of a huge demographic shift, not just in the United States, but in the entire world.

For many years, there has been a dwindling supply of qualified business buyers. That lack has been exacerbated by the simple fact that the generations following the Baby Boom are getting smaller and smaller.

Unfortunately, the shrinking pool of buyers, coupled with economic uncertainty and tighter credit, has created an untenable situation for boomer sellers.

Increasingly, they are having to make tough choices when it comes to retiring.

Boomer business owners who are not leaving the company to their heirs are often finding themselves:

  • Running the business for a lot longer time than they ever planned.
  • Selling the business in hurry at a bargain basement price, thus increasing the odds that they will not have enough money to retire comfortably.
  • Resorting to using a business broker and having their companies on the market for months, perhaps even years.
  • Closing down and walking away- even though the business is still profitable.

Within a few years, the number of business owners ages 55-75 who want to sell, or who must sell due to health or other adverse life circumstances, will double.

For many of these owners, the successful sale of the business is the cornerstone of their retirement plan, comprising the bulk of income they expect to receive in their later years. Most of these pre-retiree entrepreneurs have just one shot at selling their companies. A small mistake could cause them to run out of money in retirement or have to drastically alter their lifestyles to accommodate limited income.

Unless there is an actionable exit plan in place at least two years before they want to retire, boomer owners could face a truly painful situation when the time comes to leave.

After all, the current “old school” sales process has a lackluster 3% success rate right now. It’s not a stretch of the imagination to suggest that this rate could go even lower as the critical mass of pre-retirees wanting to sell builds.

If you are a business owner over 55 who is planning on selling a business to fund your retirement, then you need to find a qualified mentor to help guide you through the complexities of the exit process.

Business brokers should always be the LAST resort if you are serious about selling your business for more money, with less stress, and with a view to creating a stream of income you can’t outlive. Most brokers cannot do that for a seller, even if they want to. It’s better instead to seek guidance from an experienced business owners who has been in the trenches and understands what selling a business is all about.

If you do, however, decide to use a broker, or if you seek the advice of a business acquisitions mentor, you must exercise due diligence or risk an adverse outcome.

Be certain you thoroughly check out the qualifications of these advisors.

Always insist on someone who:

1. Has a minimum of 10 years experience in the real business world. An MBA is nice, but ask your mentor about actual businesses he or she has bought and/or sold. Theorists and philosophers have zero value when the time comes to actually SELL a company. Look for solid, quantifiable experience.

2.Can produce verifiable client testimonials. Any worthwhile mentor or broker ought to be able to produce real clients with whom you can speak. If the only thing he or she is willing or able to give you is some vague written testimonial from “Sam S.” (who may or may not be a real person) then you should avoid that consultant.

3. Asks you important questions about your desires and goals for the sale. Part ways with any so-called expert who doesn’t want to hear your wishes, concerns, and ideas.

4. Has the knowledge, tools, and business acumen that are essential to a successful business transition. This is no place for hobbyists or dabblers. Demand someone who specializes in buying and selling successful businesses. Don’t be afraid to ask the question, “How many deals have you personally done?”

5. Knows how to structure the sale proceeds so that you get a predictable, reliable stream of income for life. Ask potential mentors the question. “What can you do to help me ensure that I never outlive my retirement income?”

There are several other important factors to consider when partnering with an expert, including some less tangible, but nevertheless important factors that should be present.

For instance, is it easy for you to tell that this person actually enjoys what they do? Does he or she seem to radiate genuine enthusiasm for helping retiring business owners build a prosperous, successful life after business? Are they truly grateful for the opportunity to work with you? Does this person respect your achievements in building the business and seek to preserve its’ legacy of success?

Pairing a worn-out, frustrated seller with a mentor who is equally burned out, distracted, or just not that in to helping others, is a recipe for failure. You need a fresh pair of eyes focused on the most important transition of your life- not someone with a cynical, jaundiced view of things.

Any expert you hire to help you transition out of your business must be capable of crafting a workable blueprint for selling success that is the direct result of their own experiences and passion for business. They must be able to translate this real life experience into a plan of action that does not frustrate or confuse you. They must also be 100% committed to your vision of success, whatever that vision may be.

Remember, you probably only have one chance to sell your business the right way. It pays to plan, prepare, and partner with an expert on whom you can rely until the deal is done.. and after.