Plan Ahead for a Smooth Sale

The role that small business plays in the economy is generally well understood but how well do the owners of those businesses understand their true worth? The large number of business owners fast approaching retirement will need to do some careful planning if they are to maximise the fruits of their labour.

For many business owners, the operations they have spent years growing may form a significant part of their personal wealth and may even be regarded as their superannuation.

Whether the plan is to sell, float or pass the business onto the next generation, the amount they get for it may ultimately determine what sort of retirement they enjoy.

According to PwC, an estimated one third of the country’s 1.54 million private business owners will be over the age of 55 at June 2024.i It is anticipated that in the decade to 2024 more than 1.4 million owners employing over 7.9 million people and contributing almost $500 billion in GDP will retire.

While a surge in business exits sparked by retiring baby boomers has been anticipated, the Global Financial Crisis slowed the pace and volume of exits as many owners decided to stay in the workforce longer.

The issue now is that with a slightly stronger economy a wave of exits could alter the value of some businesses – for better or worse.

"In the 10 years to 2024 more than 1.4 million owners employing over 7.9 million people and contributing almost $500 billion in GDP will retire". PwC

Resource URL - https://virtusuper.com.au/work/plan-ahead-for-a-smooth-sale/