Golden Eggs for Baby Boomers

From Baby Boomers to Millennials… Helping Your Business
Lay that Golden Nest Egg by ElizaBeth De Maagd

After I read an article in the New York Times about baby boomers selling their businesses for
their retirement nest egg, I realized the critical importance of maximizing a retirement package
through strategic business valuations, expert M&A help and correctly marketing a business to
realize its best return.

From 2008 to 2010, when many boomers who wanted to sell their business to move towards
retirement, or to pursue other professions, decided to retain and continue to operate their
business because the sale of their business at that time would probably have been completed at
a lower value instead of what they believed their business to be worth. This was due to the rapid
decline in the economy and generally lower business values during that period. Present day,
many baby boomers are relying on their business to provide a nest egg for their retirement. In
many cases, the value they receive from the sale, largely determines their lifestyle during their
retirement years.

According to Ken Connell, the business banking sales director at Huntington Bank in Columbus,
Ohio: “For many small-business owners, that’s their retirement. All of their wealth is in their
business.” In reference to baby boomers ready to sell, Lynn G. Ozer, the president of
government-guaranteed lending at Susquehanna Bank on Lititz, PA commented that, “Things
froze up for a few years, then got better. In 2012, 2013 and 2014, they put together great years.
Now, their books look good and they’re ready.” (Quotes and references from The New York
Times 2015)

Recently, Sterner Consulting has come across many baby boomers’ merger and acquisitions scenarios. One such scenario was where the baby boomer wanted to pass a solid waste management business to his heirs so the next generation could profit from his father’s hard work. Even though the business made millions of dollars of profit, the millennium children had other desires. His son’s dream was to start his own business in another industry which pertained to his college degree. The owner of the landfill contacted Sterner Consulting to maximize his nest egg for the sale of the entire business since the next generation decided to pass on taking over the business.  Sterner Consulting was able to consult with the father on the importance of strategic informational business valuation data, on the value of a fully documented sale memorandum including financial and operational data and information that pre-answers most of a buyer’s likely questions about the business, prior to marketing the company to serious buyers.

The single factor for increasing this long-term nest egg’s return was clearly showing the value
and the components of his business to a Buyer in an orderly and informative manner along with
the clearly stated financial results and its related documentation. That approach, we believe,
produces a bigger ROI and enhances the golden egg that helps determine the value of a long
and hard life’s work. Beth De Maagd, Business Broker at Sterner Consulting, worked with the
family through the development of a strong valuation report and financial and operational
analysis and presentation of the business.

Richard Sterner has seen the M & A market change throughout the last thirty years. He stated
that, “A Business Owner needs to work as hard at preparing and presenting a business for sale
as he has worked to develop that business over the past decades.”

If you are a solid waste business owner or a business owner in any industry and would like to
provide a golden nest egg for your retirement, please contact Sterner Consulting where we can
design a tailored information valuation and presentation package for your business so you may
highlight to potential buyers, how truly valuable you have made your life’s work.

For more information, please contact Beth De Maagd at 412.389.8467 (cell) or 412.562.0891
or beth@sternerconsulting.com.