Is This a Good Time to Sell My Business?
October 2010. There is a proverbial saying that any business is for sale if the price is right. While that may not apply to every business, it probably does apply to most businesses. Given the chaotic financial climate we are currently experiencing, is this a good time to sell your business? Surprisingly, the answer for many business owners may be YES! It depends on many factors, including your goals and the financial condition of your business. Here are some thoughts to consider.
- There are buyers out there. Our economic situation has dictated a lot of fat trimming by all the major corporations. Many executives and managers that are out of work are determined not to be “downsized” again, and are looking at the advantages of owning their own business. The economic environment has increased the pool of buyers interested in “buying themselves a job.” The migration of people from the rust belt to the mid- Atlantic seaboard area continues, many of whom are planning their relocation around the acquisition of their own business.
- It’s better to cash out than to burn out. Regardless of the success of a business, most owners will eventually burn out. The right time to sell is when you are on top of your game and the business has lots of energy and excitement. Burnout becomes a threat to the effective management of the business and, therefore, a threat to the profitability and value of the business. Potential buyers will sense this either way.
- Have you fulfilled your goals with this business? Business is dynamic. If you have achieved your personal goals with your business and are just maintaining it, this may be the time to sell before waiting too long and the business goes into decline. Buyers and lending institutions are keenly interested in how the business is trending. They are looking for businesses that have proven upward sales and profitability trends.
- Is the business still exciting and fun for you? Owning and operating a business is hard work, of course, but it should also have an element of enjoyment. The day-to-day demands of operating a business are relentless. When an owner becomes bored or has a feeling of dragging themselves through the day it may be time to consider a fresh challenge.
- Do you sense that now is a good time to cash out and move on to new ventures? If your business model has successfully produced earnings and is trending upward, this may be a great time to consider selling. Contrary to news reports, banks are making loans! It is possible for buyers with good credit and appropriate business experience to get approved for financing to purchase a business.
So, is this a good time to sell your business? It may be an excellent time, depending on your evaluation of your goals and the health of your business. There are buyers and there is money available. The question is, Is it right for you? You have worked hard and you deserve to maximize the value of your business by selling it at the right time.