Excerpted from above post:
Of the 6MM private companies, over a third of the US working population is employed at businesses with fewer than 100 employees business, 5% do more than $5MM and 2.5% do more than $10MM in sales.
Sell for 3-6x EBITA (which is in the 7-13% range). Simple example:
Revenue: $10 million.
Ebitda: $1 million.
Sale price of 4.5 times Ebitda: $4.5 million.
Taxes and expenses on sale (35 percent): $1.575 million.
Net proceeds from sale: $2.925 million.
Pretax annual income available at 4 percent of invested proceeds: $117,000 and this if you are in the lucky top 2.5%
- Fund a qualified retirement plan: put $40,000 to $60,000 in a retirement plan. At a 6 percent return and invest $50,000 a year for 20 years, you will generate a nest egg of approximately $1.8 million.
- Own real estate: business pays you rent, which pays the mortgage
Excepted from above post:
Over a third of the US working population is employed at businesses with fewer than 100 employees
For business with fewer than 5,000 employees, the average employment is 13 people.
Businesses with less than five employees make up 62% of all businesses in the US (TODO: not sure how this was calculated)
Small business owners are getting older. 51% of small business owners are over 50 years old, while only 16% are under 35.
Americans still start their businesses on their own backs. 77% of small businesses rely on personal savings for their initial funds.
Of businesses started in 2008, 41% of all and 47% of retail have made it so far.