1 Why 2013 May Be A Substantially Better Time To Sell Y our Business Than 2018 Why 2013 May Be A Substantially Better Time To Sell Your Business Than 2018 Don’t wait to sell your business, it may prove to be a very costly decision. There are a ew key ac tors that impac t the “right time ” to sell a busine ss: 1. Economic environment 2. Money characteristics 3. Supply and demand THE DEMOGRAPHIC SHIFT AND HOW IT IMPACTS YOU We are acing a massive demographic shit in Canada and one o the biggest areas that is impacted is the entrepre neurial realm. n The number o Canadians age d 55 to 64 — th ose most likely to be thinking ab out retirement — jumped by 28 per cent in the past fve years to 3.7 million. 2 n The sharp incr ease can be attributed to Canada’ s aging baby boomers, who account or close to one- third o the country’ s 32 million people. 2 n By 2011 the frst batch o baby boomers will reach 65. 5 n By 2017, the majority will be over 65. 5 According to the Canadian Federation o Ind ependent B usiness: n The number o sel-employed, who are ne aring retirement (ages 55 to 64) has been rising rapidly in recent years, growing by a whopping 7.5 percent annually since the beginning o the decade. 7 n One-fth o small business owners (or more than 500,000) are planning to retire within the next fve years, and another 30 percent will retire by 2020. That is, within the coming 15 years, more than hal o the country’s current small business owners are expected to retire . 7 n 37% o SME owners expect to sell their business to an outside party . n 71% o business owners intend to sell their businesses over the next 5 to 10 years, and 41% over the next 5 years. 6 n 300,000 businesses with 5 to 199 employees – translates into approximately $1 trillion in capital required to fnance the transition. 6 What this means is that there will be an unprecedented “rush to the exits” over the next 10 years, and an enormous requirement or capital to complete the business transactions. The limiting actor or business owners will be i they wait too long to sell,there will be ewer qualifed buyers. Oten considered as a best bet scenario to ensure the ongoing success o a amily owned business is the transer to the next generation. However, this is no guarantee or success nor is it a guarantee that the next generation will see the capital they agree on or the business transer. According to a notable Chartered Accounting frm’ s research1, only one-third o amily-owned businesses survive the transition to the second generation. And o these businesses, again only one-third will survive to the third generation, meaning that the chances that the ounder’s grandchildren will take over the business are merely 1 in 10.