Scale or Sell

Recent research has shown that more than $10 trillion in boomer-owned business assets will be passed down or sold by 20251. However, according to the 2015 US Family Business Survey conducted by PricewaterhouseCoopers, only about 27% of private businesses have done any exit planning whatsoever. Even fewer have a documented hand-off plan in place, which may leave them vulnerable to events which could force a hurried sale2.

According to Matthew Shafer, a Financial Advisor and Senior Investment Management Consultant for Morgan Stanley, succession planning is one of the major challenges facing family-owned businesses today—even ahead of labor costs, finding qualified employees, foreign competition and health care expenses.

As part of my practical and engaged business research into the succession planning of the Baby Boomer cohort, it’s clear and understandable that more Boomer-owned businesses than ever are looking for an exit. With an aging baby boomer population, many articles and research topics have revealed that many otherwise well-run companies are extremely disappointed when it’s time to sell because they either don’t receive the valuation they expect or, even worse, they don’t get any offers at all.

That’s why it’s imperative that sellers make their businesses as attractive as possible. The strategies presented here will not only help this generation maximize value but will also be necessary to ensure that their business is salable in the future.

Simple Keys to Maximize Value

It can be hard to focus on increasing the value of a business if there is no immediate intention of selling. There are so many other competing demands for your time. But for those proactive Boomer business owners who see the end game of cashing out at some point, there are a few simple concepts that will help you maximize the value of your business:

Switzerland Structure

Don’t be overly reliant/dependent on Customers, Employees or Suppliers.

Financial Performance

Understand that increasing revenue and profit are paramount.

Growth Potential

The value of a business is driven by the case made that profits are going to grow. Otherwise, the profit is discounted (decreased) each year for the next few years.

Teeter Totter

Improve cash flow by getting paid faster and paying bills slower

Recurring Revenue

Of the 6 forms of Recurring Revenue, ensure that you capitalize on those that increase the value of the business the most.

Monopoly Control

Are you commoditized? Have as much control over how you price your product as possible. Are you different and do customers care?

Customer Satisfaction

Consider your Net Promoter Score (NPS). Customer promoters drive value. Learn more, ask more, critique yourself more.


Hub and Spoke Management

How dependent is the company on you personally? High reliance on the hub (manager) is of lower value.

1 Source: Forbes, Why Small Businesses Are Feeling Economic Crunch, Oct, 2015.

2 Source: PricewaterhouseCoopers, Family Business Survey 2015,