A lot of planning and preparation goes into preparing a business for sale. Some small business owners are having to re-visit their timelines when it comes to selling; often a lot more time and research is required to get a business sale ready.
The graph below shows the gradual decline in earnings of small businesses before index and tax. This decrease can be attributed to the increase in the number of businesses for sale. According to the VMB-RMIT, there are currently 60,000 businesses listed for sale.
Business owners who are entering retirement and own small to medium size businesses are facing a challenging time when it comes to selling. For the past 11 years, the value of the small business market in Australia has been declining (VMB-RMIT).
Recent quarterly data published by the VMB-RMIT shows that businesses with a turn-over of less than $5 million have been the hardest hit.
As well as the large quantity of small-medium businesses for sale in Australia now, lack of planning is also contributing to business owners struggling to sell their businesses.
Some business owners are unaware of the importance of preparing their business for sale. Often when a business owner decides to sell, they have put limited time into thinking about the longer term and strategic issues their business may face.
The way a Baby Boomer may have operated their business over time, will be different to how new owners will look to do it. Changes in technology, competitors and consumers can all cause questions for the potential buyers of a business.
Selling a business takes time and business owners are encouraged to engage with an expert such as a business broker well before they want to sell. A Business broker can help in preparing a business for sale and guide a business owner through the whole process which can sometimes be rather complicated.
Buyers of businesses can also engage with a business broker who can help assess their needs and find a business that is the right fit for their experience and lifestyle.