By EMILY MALTBY
Millions of small-business owners may be delaying retirement to their late 60s or 70s and beyond, in hopes of riding out the sluggish economy and a slump in the sales value of small businesses.
But waiting for the market to recover could backfire, according to some who study small-business valuations. If and when the economy brightens, there could be a hefty backlog of retirement-age small-business owners eager to sell out, competing with newer sellers for the same group of buyers.
“If you continue to hold on another day, that’s another day where several more thousands of business owners turn 65. The market will be flooded for small businesses and the valuation will continue to trend down,” says John Warrillow, creator of the Sellability Score, an online tool to help business owners value their firms.
For those looking to sell their business at the highest possible price in order to retire comfortably, “I don’t think waiting is necessarily the answer,” he adds.
The first wave of baby boomers turned 65 last year, and the growing number that will reach that milestone in the next five to 10 years could compound the problem. “That will make the field enormously crowded,” says Steven D. Popell, an exit-strategy consultant in San Francisco. “The number of companies that will be up for sale in the next decade will increase dramatically.”
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