Bankers: don’t be surprised when your longest-lasting client relationships suddenly come to an end. You might be at the top of your game — but some of your clients are ready to slow things down. 

We’ve been watching this story unfold for over a decade: Boomer and Gen X business owners are selling their businesses and retiring. As a result, trillions of dollars of wealth and millions of businesses are coming available for sale. 

According to a report from the Exit Planning Institute, here are the facts: 

• Baby Boomers own between 63%-66% of private businesses in the U.S. 
• Between 80%-90% of Baby Boomers’ wealth is tied up in businesses
• Boomer-owned businesses represent over $10 trillion dollars in wealth 
• 76% of these business owners plan to transition within the next 10 years
• Only 30% of businesses transition to a second generation, with only 12% surviving to a third

With these stats in mind, you need to prepare yourself for when your loyal clients begin stepping away. But you don’t have to sit idly by while your loyal clients sell off. If you can recognize the signs of an owner looking to exit, then you can turn this from a challenge into an opportunity.

No need to get your crystal ball out. You can probably predict a client’s retirement and sale based on three categories:
personal life, industry trends, and company status.

Instead of letting your clients slip away, check out our tell-tale signs that your client is on their way out: 

Personal Reasons to Sell a Business

Everyone has their own unique challenges, but these are a few aspects of a business owner’s personal life that may affect their decision to stay on board or sell: 

• Age: If any of your clients are approaching (or already well past) retirement age, they are very likely considering retirement. The Baby Boomer generation began retiring over 15 years ago, and the eldest Gen Xers are joining them.
  

• Health: Has your client had health concerns? If so, they may be ready to take a step back and focus on their care. This applies not only to the owner, but their family as well. If a spouse or child is dealing with ill health or disability, the owner may need to sell to cover medical costs or to spend quality time with them.
  

• Attitude: Your client’s heart might not be in it anymore. If you notice your client’s passion is fading, it’s a sign that they might be considering a sale — or already in the process. Or worse, flagging leadership could lead to the business going under.
  

• Family: Your client’s children may not be the ideal candidates to take over the family business. If there isn’t a succession plan in place, the owner may opt for a sale to gain liquidity for retirement.
  

• Liquidity: Your client may be interested in a new investment or business venture, and selling their business may be their best option for raising capital.  

How often are you catching up with your clients? If you’re scratching your head at any of these signs, it might be time to pick up the phone or (even better) schedule a business lunch to get a better understanding of their personal circumstances. 

Industry Trends That Lead to Business Sales

It’s always a good idea to stay up to date with industry trends as they relate to your clients. Take the time to subscribe to magazines and newsletters or join relevant industry groups on LinkedIn. 

Armed with industry knowledge, you can be on the lookout for trends that might have your clients weighing their options. Here are three industry red flags that could indicate a good time for your client to sell:  

• Competitor Sales: Your client is most definitely taking notice if their competitors are selling for decent multiples and may be tempted to make a sale of their own
  

• Industry Consolidation: Back to competitor sales, check out who they’re selling to. If larger companies are buying up competitors, your client may want to get in on the action during a buying frenzy.
  

• Increased Competition: Is your client’s industry getting a bit crowded? As competition heats up, your client has only two choices: shape up or ship out. Based on their personal life and capital, your client may choose to sell rather than deal with increasing competition. 

While these trends are harbingers for a sale, they’re also excellent opportunities for you to flex your expertise and advise your clients while they consider selling. 

Company Status Changes That Indicate a Sale is Coming

This is where it gets tricky. You might ask about your client’s kids or their health in casual conversation, but how often are you getting specifics about the inner workings of their company? 

It might take some prompting, but these are topics you should be asking questions about so that you can stay abreast of your client’s situation. 

• Management: The owner of the business may not be the only one hoping to retire soon. If the majority of senior management is nearing retirement age, it may make more sense to sell the business rather than replace the top brass. 
  

• Company Growth: Company growth is exciting — but sometimes a business outgrows ownership. Owners may not be ready (or willing) to take on more responsibility or deal with legal requirements associated with higher employee counts. This may be their golden opportunity to make a lucrative sale while the business is doing well.
  

• Goal Fulfillment: Smart business owners start their businesses with an end goal in mind — and it’s an important topic to discuss early on in your partnership. As your client reaches or nears their sales or revenue goal, it could be a sign that they will want to exit upon achieving those goals.
  

• Corporate Behavior: If your client is making noticeable changes to their business, they may be on their way out. Pay attention to changes in corporate structure, major dips in inventory, and audit orders. 

The best way to stay on top of these company changes is to establish a baseline at the beginning of the relationship — but better late than never. Without a strong grasp of the company structure, goals, and protocols, you may miss these warning signals. 

Opportunities After the Sale

Now that you’re on the lookout for signs of impending sales, you need to be ready to take on opportunities as they arise. If you play your cards right, you could continue working with your client in a different role, like

• Acting as an advisor 
• Helping the buyer to secure financing
• Referring your client to your bank’s wealth management department
• Staying on to work with the buyer following the sale

Bottom line: It’s important to become more to your client than just a banker. Be aware of your clients’ changing circumstances and be their trusted advisor as they navigate life’s next phase — it might just pay off.