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Fact Sheet
Small
Business Succession or Continuation
Small business overview
·
98% of America’s 9.5 million
businesses employ less than 100 people.
·
90% employ less than 20.
·
1.5 million Americans operate home
based businesses.
·
Small business accounts for all
growth of the GNP
·
Responsible for creation of
essentially all new jobs
·
Less than 1% are Public companies
·
160,000 new businesses are created
monthly
Succession expectations
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50% of business owners plan to pass
their business on to family.
·
10% anticipate selling to a
competitor
·
30% plan to sell to employees
·
10% expect to sell to outsiders
Succession
realities
·
15% pass to a second generation,
and 5% of the second generation businesses pass on to the third.
·
10% sold to competitors
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5% sold to employees
·
10% sold to outsiders
·
Balance are closed and liquidated
·
A recent survey of more than 5,000
businesses owners revealed that 76% closed their doors in order to “move on”
-- only 24% of the businesses succeeded the owner or were sold
·
100,000 go out of business monthly
Why selling a business is difficult and
different
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Confidentiality must be maintained
(Don’t let anyone know the business is for sale, but sell it quickly)
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Buyers don’t know exactly what
they are looking for
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No one really knows what a business
is worth but everyone has an opinion
·
Banks are reluctant to provide
acquisition funding
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Future profitability is totally
dependent upon new owner, past performance cannot predict future results
·
Most private business owners strive
to minimize profits making “real earnings” difficult to discern.
·
Usual buy/sell rules cannot be
applied when selling a business
·
A highly charged emotional
atmosphere complicates the purchase and sale of smaller businesses
·
The buy or sell decision requires a
careful balancing of personal as well as financial considerations
·
Business buyers and sellers are
unfamiliar with the unique process employed to safely transfer ownership
·
Buyers, sellers, and their advisors
fail to recognize the real motivation of buying or selling and instead focus
solely on financial matters
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There are very few buyers for a
business that has to be sold
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For additional information contact:
Ted Burbank, CBI
508 794-1200
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