Within 5 to 10 years there will be thousands of small business owners who are forced to close their enterprise at the point at which they wish to retire.

Following a life time of hard work many will sadly walk away with ... nothing!

The hard facts are there are not enough buyers who are willing to pay a fair price.

The multiplier effect is enormous.

Not only will the owner walk away so will many employees and in many country towns there will be small business that will close that provide critical services to their communities.

A recent KPMG family business survey found 59 per cent of respondents would consider selling their enterprise if approached by a genuine buyer. But just over a third of respondents said their business was “exit” or “succession” ready. The majority of respondents had annual turnover above $1 million, meaning even more sophisticated private enterprises have plenty of work ahead to make themselves ready for sale.

What does "exit ready", "sale ready" or "succession ready" actually mean?

The harsh reality is that ... it's not about stating "we are selling the business", it's not about placing the business in the hands of a business broker or agent, that's the last step.

The valuation reality check

If your thinking is based on past values then chances are that valuation multiples of about 6 times earnings before interest and tax (EBIT) prior to the GFC, for a quality small business worth more than $5 million, are now around 3.5 to 4 times. There is also a good chance of them heading below 3 times ... this is a huge destruction in value.

A five year strategic plan

Exiting, transitioning or winding up a business without a plan will be cause for huge financial and social pain, for yourself and those employed by and customers of your business.

Conducting an orderly process with a medium term plan ahead of the "d day' you have in your mind will be worth it's weight in gold.

Business owners who have the foresight to interact with their staff, or other  people who need a job, who are eager to start a venture, run an existing one are in the box seat.

This issue is quite simply too big a threat, and an opportunity, to pass off as not important, or to think that the problem is years away.

It's happening now!