I was recently at a networking event and was asked an interesting question: Do I see the current M&A market as being a buyer's market or a seller's market? This is a very intriguing question because my immediate response that I gave has changed the more thought that I put into the question.
Currently the initial reaction would be that the market is great for if you are a seller. The number of businesses being listed for sale is bound to go up in the coming years so the competition you might face 5 years from now will be increased. Essentially there are a lot less fish in the sea so you are a pretty appetizing acquisition. This fact coupled with the fact that there are many folks out there that have access to funding or cash on hand to make an acquisition makes it a great time to be a seller.
It used to be a dirty little secret but has gained a lot more attention over the last decade: many professional athletes go broke after they retire. To the average person this seems impossible. These are people that make millions of dollars per year. They often retire before age 40. And before age 50 we hear about collection suits and bankruptcy. So what happens to these high profile individuals. Often its the same issue that business owners run into: a failure to plan.
Business owners have to plan to exit their business. Either by choice or by circumstance, every business owner will have to retire, sell or liquidate his or her business. Obviously one of these choices is not a very profitable way to exit your business. How do you prepare your business to not only survive your time but allow you to be comfortable after your time in your business has ended?