For most business owners, the deal of a lifetime is the sale of their own business. Get it right and you are retired forever. Get it wrong and you might find yourself working for another 10 years.
What I want to discuss today is TIMING. Yes – when you sell your business has a hell of an effect on its price.
If you are looking to sell a business right now, then you might consider holding off for a while – especially if you are in an industry that’s taking a beating by the global financial downturn.
Here are some reasons for not being able to achieve the highest price right now:
• Finance is harder to come by – banks are not lending for business funding purposes – so buyers have to kick in more cash
• Listed market is down – so for investor type buyers, its safer and easier to invest into ASX listed companies and get a decent return
• Overall business sentiment is down so generally less buyers in the market place
• More businesses on the market due to difficult or distressed situations – so more bargains to choose from for buyers
• Certain sectors are being pulled down by the global economic slowdown – if this is happening to you, your profits may be affected therefore affecting your potential sale price
• Less companies seeking acquisitions of other companies as they themselves may have funding issues as a result of being over geared – or lack of access to capital (debt or equity)
Of course if you are buyer, a lot of the above points will most likely be beneficial – but lets save that for another blog post.
So the key message here is if you are a seller – sit tight, hang on and maybe spend the next year or so focusing on improving the sale value of your business.
If you’d like to learn how to do this for very little cost, email me admin@teldar.com.au and Ill arrange a free ticket for you to attend my next workshop titles “Building Wealth Through Business” where I cover a lot of value creating strategies which could double or triple the value of your business over the next 12 months
Reuben Buchanan
