You want to sell your business, but you don't have to sell it today. After all, you've worked hard for many years to build the value of your business. Sure you want to spend more time with family and friends, travel, play golf or do whatever it is you like to do when you're not working. But not at the cost of leaving money on the table. What's the point of working hard for all these years if you can't sell your business for top dollar? You can always stay on a few more years if you have to. As they say, timing is everything.
Is now the right time to sell your business?
We can't answer that question for you from the personal point of view - you and your family have to make that decision. But we can provide some insight into the market for selling businesses. From what we see, current market conditions are extremely favorable to business sellers.
Here are three factors that lead us to conclude that current market conditions have created the perfect time to sell your business:
Many business owners who would have liked to have sold over the last few years held off because of the recession. Buyers have had thin pickings. This created a huge backlog of buyers - individuals, equity funds and companies - searching for businesses to buy.
Buyers are competing amongst themselves for the few good businesses available for sale, keeping valuations high. That makes for a real seller's market.
Availability of Capital for Acquisition Loans
Buyers - equity funds, companies and individual investors - are flush with cash. And lenders, who need to make loans to stay in business, are actively competing to find good deals to fund.
Additionally the Small Business Administration (SBA) recently increased its ceiling for business purchase loans and streamlined its approval process, making it easier than ever for buyers to be approved.
Buyers have access to the necessary funds. They're just waiting for the right investment opportunity.
Low Interest Rates
Interest rates are still quite low. Low interest rates make it easier for a buyer to afford a strong sales price by lowering monthly debt-service payments. With low interest rates, a buyer can pay a strong price for your business and still stay within the lender's approvable debt-service to revenue ratios. It's a win-win situation. You achieve a high price for your business and the buyer keeps his monthly payments affordable.
But this window of opportunity created by low interest rates won't last forever. As you've probably heard, interest rates are expected to climb as the economic recovery matures. It takes up to a year to sell a business. If you're thinking about selling, you should start the process now.
Low interest rates, pent-up buyer demand, and the increased amount of available capital have combined to create an ideal situation for business owners thinking about selling. Is this a good time to sell your business? No . . . it's the perfect time!
If you would like to see if the time is right to sell your business, please click here or on the link below or call us at 888 468-1660. We'll be happy to schedule a free intitial consultation and complimentary business appraisal.
There's never an up-front cost or obligation, and all communications will be held in the strictest confidence.
Prime Investments Business Brokers takes the risk out of selling. For over 25 years, Prime has helped business owners in Florida, Georgia, Virginia, Maryland, Pennsylvania, Delaware, New Jersey and Washington, DC sell their businesses - without charging up-front fees.