The Great Employee Succession Opportunity

January 2, 2024

A recent report has pointed to the significant level of SME businesses likely to be sold in the next 10 years, and how this trend underscores the importance of succession planning in driving the growth in sales to EO.

The report points to the exit of baby boomers but it seems a bit delayed to me. I believe most of them have already left, especially since the study looked at shareholders over 43 years old, putting them, like me, in the Gen-X category.

If there is a significant volume of businesses heading toward exit, greater than historical volumes, then our experience, in recent years points toward a greater volume of EO transactions, driven by:

  • The significant tax advantages
  • The control of the process
  • The inability to sell to trade buyers, if the supply of businesses for sale outstrips demand, due to funding or resource capacity
  • The frustration with the rise of leverage deal acquirers, with no or little internal funding (to be covered in a later blog)

At vector we have brought together the perfect team to support our clients in their succession and transition to EO.