Baby boomers, I’ll buy your business but you need to fix EBIT first: Mathias Kopp

Business owners are by no means doomed to sell their business under value or worse at near zero valuations and retire with nothing, if only they took their destiny in their own hands.

Admittedly, vendors face both structural and cyclical challenges. The tidal wave of baby boomer-owned businesses for sale that is about to hit the market exerts downward pressure on enterprise values. According to the Australian Bureau of Statistics, there are more than 80,000 small to medium-sized enterprises with 20 to 199 staff. It is estimated that around 70 per cent of these businesses are owned by baby boomers, of which around two-thirds have succession issues. They are forced to sell or to wind their business up with the hardship that this causes for all involved, especially employees.

But it is not only the structural oversupply of businesses for sale that is impacting on valuations, or, more precisely, on earnings before interest and tax (EBIT) multiples. Average EBIT multiples now range between 1.5 and 1.7, as reported by organizations such as the SME Association or The Entourage.

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Baby boomers, I’ll buy your business but you need to fix EBIT first: Mathias Kopp:

For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.