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By 2021, baby boomers will be retiring at a rate of 11,000 per day. Almost 77 million people, about 20 percent of the US population, are going to retire between 2013 and 2029, and it is estimated that $10 trillion in existing business value14 will need to change hands.
This substantial increase in supply of available businesses for sale is expected to result in a buyer’s market like we’ve never seen. This means the infrastructure built by generations before will be available for purchase at the most affordable levels ever experienced.
very recently developed, top-tier programs at Harvard, Northwestern, University of Chicago, or Stanford, the resources for learning this approach are limited. Instead, I spent the last decade molding a process based on my experiences and now want to share them.
100 percent of non-retired millionaires who live in the United States own their own businesses. Out of that group, about 20 percent are professionals running a medical or service business, and the balance are entrepreneurs and small business owners.
91 percent of everyone having over $5 million in net worth owns their own company—a
Smaller exits, defined as those under $30 million, are where all the action is and exactly where you won’t find VCs. More and more private equity firms have figured this out, but in companies with less than $2 million in earnings, even they begin to be noticeably absent.
The first step toward being a successful leader of your own company is to think like a CEO in the first place. If you don’t cultivate the “right” thoughts, you’re defeated before you start. You need to eventually build a vision of where you are headed and how you will get there, but without the mental wherewithal to navigate the waters, it’s just a business plan.
Flourish: A Visionary New Understanding of Happiness and Well-Being, he reveals the five pillars of well-being, which he identified through the acronym PERMA: Positive emotion Engagement Relationships Meaning Achievement
These three industry types of product, distribution, or service stand as three different offerings, or values, to the market, and are probably the biggest three differentiators among deciding on an industry.
I am looking for a [choose product, distribution, or service] company with [enter the type of growth opportunity], generating [define size by SDE range], with [enter any limiters].
“I am looking for a distribution company with strong sales and marketing processes but needing operational excellence, generating $300,000 to $400,000 in Seller Discretionary Earnings, in or around the Chicago area.”
professional buyers aren’t hanging out exclusively on bizbuysell. Instead, you need to get out and meet the people who have deal flow in your area. In your case, this is the business brokers, intermediaries, I-bankers, and M&A Advisors44 who get the listings in the first place.
80 percent of the private equity professionals I know that pay the high fees to services like Axial have expressed in one way or another that they aren’t there to get the specific deals on the platform. Instead, they are there to learn who has the deals, then build relationships with them. They’re using the marketplaces to get upstream, not for the specific listings. It’s time to take a page out of their book and get hustling.
Put together your personal balance sheet (resources available to help you on BuyThenBuild.com), network with any potential equity backers if needed,48 and search the internet for business brokers, business intermediaries, and investment bankers in your city. Look on LinkedIn. Make a list of these as you go along with contact information for each one. You are going to try to meet with all of them.
very few, if any, high net worth individuals pay all cash for a business. I have to conclude this is because they understand the higher ROI associated with acquiring with some portion on debt—just like PE firms.
Banks work with a lot of small business owners and entrepreneurs and might even know potential sellers. But don’t assume they’ll share proactively—make sure you ask them specifically. They might be able to put you in touch with someone considering selling. In the same regard, bankers have exposure to many M&A Advisors. Ask them who they have had exposure to, who they like, and whether they’ll help you with an email introduction.
Banks with dedicated SBA lenders on staff and preferred status are clear communication that the bank is looking to grow by supporting acquisition entrepreneurs. They typically hold “PLP” status and can approve SBA loans in house and execute without as much red tape. You want to know these banks and build relationships with them now, before you have a potential deal.
