Business owners are burned out, worn out, and past ready to get out. More than 1 in 4 business owners who put their business on the market this spring did so because of burnout according to the first-quarter survey of business brokers and M&A advisors conducted by IBBA and M&A Source (Market Pulse Survey) whereas unsolicited offers dominated the reasons business owners sold in Q2.
Retirement had led as the #1 reason business owners decide to sell their companies through Q1 of 2021… consistent since the quarterly Market Pulse survey began in 2012. However, a dramatic jump in burnout appeared in Q1 2021 as the reason business owners decided to sell due to burnout (still 2nd to retirement) and in Q2, all sectors reported the #1 reason as an unsolicited offer that lead to the sale – between 45% and 71% of those who SOLD their companies. Retirement led a distant 3rd or last for all sold companies.
Additionally, 15% of sellers had some kind of health issue driving them to market in Q1. This is higher than prior surveys and suggests the pandemic had taken a heavy toll on business owners’ health. Thankfully, health was not a driving cause for more than 8% of those selling in the less than $500k range and just 4% in the $2-$5M range in Q2.
Business owners already deal with a lot of stress and pressure, from hiring qualified employees to managing cash flow. For many, the pandemic is the final nail for those who had financial struggles due to the pandemic as well as those who stayed operational through the pandemic worrying about employee safety, PPP versus unemployment, and retaining their talent.
Unsurprisingly, business owners said, “Enough is enough!” in Q1 and “YES!” in Q2 in response to burnout and unsolicited offers, respectively.
Don’t get burned out, worn out, and past ready to get out! Don’t let your buyer dictate the timing and terms! Sell your company when you are ready…your planned decision, even with an unsolicited offer.