This article is one of a series that offers insight and guidance into the process of buying selling or valuing a business. Whether you want to buy, sell, or appraise the valuation of a going-concern business, these articles provide specific guidance and references to help you accomplish your goal.
The Time To Sell Might Be Right Now!
by Tom West
A survey of business activity
nationwide shows that many sellers are taking advantage of the window
of opportunity offered by today's favorable marketplace. In this
recent survey, almost one-third of business owners responded that
they are considering the sale of their business. The first question
one might ask, given the relatively healthy financial climate, is
WHY? Selling when times are good? The answer, for many sellers,
can be a resounding YES! Here are some of the reasons why, followed
by tips for getting the process started.
The Buyers Are Out There: The current economic
upturn has depended to a great extent on trimming the corporate
fat. Executives and middle managers out of work--and determined
not to be "downsized" by big business again--are eyeing
the advantages of being in business for themselves. Since 1990,
the percentage has steadily grown of those corporate executives
who leave jobs in order to become independent business owners. It
isn't just the money they are dreaming of--it's the desire for more
control over their lives.
How to find these buyers? The business
broker is the professional to whom sellers turn when looking for
serious, "qualified" buyers. The business broker not only
helps match the right buyer with the right business, but also educates
the buyer in the buy-sell process, alleviating concerns and keeping
the transaction in steady forward motion. With plenty of buyers
to choose from in today's market, it's more important than ever
to identify the time-wasters and those who think they want to buy
but really aren't ready to take the big step.
It's Better To Cash-Out Than To Burnout:
Burnout can come with a business that's successful as well as one
that's failing to grow. The right time to sell is before the syndrome
becomes a threat to the effective management of a business. What
are the warning signs of burnout?
That isolated feeling. The burnt-out owner
has been "chief cook and bottle washer" for such an extended
period of time that even routine acts of decision-making and action-taking
seem like Sisyphean tasks. These owners have been shouldering the
burdens alone too long.
Fuzzy perspective. Burnt-out owners are
so close to their work that they lose perspective. Prioritizing
becomes a major daily challenge, and problem-solving sometimes goes
no further than the application of business band aids that cost
money in the long run rather than increase profits.
No more fun. Of course owning a business
is hard work, but it should also include an element of enjoyment.
The owner who drags himself or herself through every day, with a
sense of dread--or boredom--should consider moving on to a fresh
Just plain tired. Simply put, many business
owners burn out from the demands placed on them to keep their companies
operating day after day, year after year. The schedule is not for
everyone; in fact, statistics show that it's hardly for anyone,
The important point here is for business owners
to recognize the signs and take action before burnout begins to
hinder the growth--or sheer survival--of the business. Many of today's
independent business owners feel they've worked hard, made their
money and sense that now is a good time to "cash-out"
and move on.
The Best Price Comes from Selling While Up:
Other than burnout and its consequences, there are other factors
that can lead to the "forced sale" of a business. Compelling
personal problems (a divorce or death in the family, poor health),
shortage of capital or outright failure of the business, the lack
of heirs to take over--these are the traditional examples. Instead
of waiting for unfavorable conditions, potential sellers should
keep a wary eye out for that all-important right time for putting
their business on the market. When might that time be?
The Small Business Administration (SBA), in researching
selling trends, reports that three to five years is a long enough
stretch for many of today's business owners. One in every three
plans to sell; many of them right from the outset. The business
they've bought is not a legacy for their children--it's a shorter-term
investment of their time as well as their money. The ability to
present a healthy operation, with an owner in the position to "role
model" its success are major advantages in the completion of
a successful business sale. One of the surest ways to maximize the
value of a business is not waiting too long to sell.
About the Author
||Mr. Tom West is the editor/publisher of The Business Broker, a monthly newsletter for the business brokerage field. He has written or co-written numerous books including the The Business Reference and Pricing Guide and The Resource Handbook for Business Brokers. He is a founder, past president, and former executive director of the International Business Brokers Association (IBBA). He is a frequent lecturer and seminar leader on all aspects of buying, selling, or appraising a business. Mr. West is probably the most knowledgeable individual in the country today concerning the issues of buying or selling small to mid-sized businesses.
If you're considering buying, selling, or determining the value
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reports, and software we have at Business Book Press to help you
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The Business Reference and Pricing Guide is the bible of the business brokerage world. If you're a shrewd business buyer or seller, you will want this book to learn what just what the business broker knows. It will pay you big dividends throughout every aspect of the purchase and sale process. Learn more about it...
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Preparing A Business for Sale provides business owners with an understanding of the process they need to know to sell their business for the most money. Contains hundreds of little known tips, ideas and strategies to maximize the selling price of a business. Learn more about it...
Strategies for Successfully Buying or Selling a Business is our bestselling book. It has been recommended by Kiplingers Personal Finance Magazine, the BottomLine Personal Newsletter, and has been awarded the Best Business Book of the Year Award from the North American Bookdealers Exchange (NABE). Learn more about it...
Anatomy of a Business Purchase Offer provides you with all of the practical hands-on knowledge you need to make a successful purchase offer to buy a business. The author uses an actual Purchase Offer form to show you exactly what needs to be written and why! He details all of his recommendations in a line-by-line format for each and every aspect of the purchase offer. Learn more about it...
The Business Buyer's How-to Kit: We've assembled a specially-priced Kit with all of the key information you'll need to know to successfully buy a business.
The Business Seller's How-to Kit: We've assembled a specially-priced Kit with all of the key information you'll need to know to successfully sell a business.