70% of Boomer-Owned Businesses Lack Exit Plans — Don’t Let Yours Be One of Them
As Baby Boomer business owners approach retirement, one reality is becoming clear: most don’t have a plan for how — or when — they’ll exit their business. And it’s not just a personal problem. It’s a $1.2 trillion risk in lost value across the U.S.
If you’re still in the driver’s seat without a clear plan, you’re not alone — but the time to act is now. Waiting too long often forces rushed decisions, underwhelming offers and missed opportunities to maximize the return on what you’ve spent years building.
The good news? With the right approach, you can take control of the process and put yourself in a position of strength.
Buyers Expect Prepared Sellers
Today’s buyers are smart, selective and well-capitalized — but they expect clean financials, transparency and businesses that are ready to run without the current owner. When sellers aren’t prepared, they leave money on the table. Period.
Your 3-Step Advantage to Maximize Value
Here’s a simple framework I use with business owners to increase sale readiness and value:
1. Diagnose: Understand your business’s current sellability
2. Fix: Eliminate valuation killers and unlock hidden value
3. Prepare: Present your business the way a buyer wants to see it
Let’s focus on Step 1, Diagnose—and how to calculate your Sellability Score.
Step 1: Calculate Your Sellability Score
This quick diagnostic gives you a snapshot of how your business might perform on the market today. Rate yourself in four key categories:
Financial Health (up to 30 points)
Net Profit Margin >15%? That’s a sign of strong operations. (+10)
Recurring Revenue? Buyers love predictability. (+10)
Clean, Audited Financials? This builds trust and speeds up deals. (+10)
Market Position (up to 25 points)
Dominant Niche or Unique IP? Creates defensible value. (+15)
Growing Industry? Think trades, healthcare, services. (+10)
Operational Independence (up to 25 points)
Business Runs Without You? Buyers want systems, not owners. (+15)
Documented Processes? Smooth handoff = less risk. (+10)
Growth Potential (up to 20 points)
Scalable Customer Base? The bigger the upside, the better. (+10)
Untapped Markets? Show them room to grow. (+10)
Score Yourself:
80–100: Premium – Asset – You’re in excellent shape.
50–79: Fixer-Upper – A few strategic changes can dramatically boost value.
Below 50: Fire Sale Risk – It’s time for immediate action before value erodes.
SDE vs. EBITDA: Know the Difference
For owner-operated businesses, Seller’s Discretionary Earnings (SDE) is typically the preferred valuation metric. It reflects the total benefit the owner receives — salary, perks, one-time expenses — and paints a clear picture for a future owner stepping into your role.
If your business is growing and has management in place, EBITDA may be more appropriate. Both can be useful depending on your buyer type — and I can help you model both scenarios.
Conclusion: Don’t Miss the Moment
The Silver Tsunami of retiring business owners is already reshaping the market. If you’re even thinking about selling in the next 1–5 years, now is the time to get clear on where your business stands and what to do next.
Schedule a consultation and let’s talk about your business.