When the market is ready may be different from when you are ready. Timing is everything, and can make an enormous difference in the amount of money you walk away with from the sale of your business.
The ideal time to sell is when interest rates are low, inflation is low, tax rates are relatively low and it is a seller’s market. Few would argue that interest rates, and taxes will be increasing in the future. We all know about the baby boomers who will be looking to retire real soon.
At this point in time, there is a lack of quality businesses on the market, so those that are on the market command a higher price by the simple market condition of supply and demand. Most would call the current market a seller’s market. As the millions and millions of boomers decide to retire and look to sell their businesses, there will quickly become an oversupply and glut of inventory, reducing the value of a given business as the picture changes to a buyer’s market. This time is approaching quickly.
The economy is still in an up cycle for now. As the economy crests and starts the inevitable downward trend, interest rates, taxes, and inflation will go up; the market will be overwhelmed with boomers trying to sell their businesses; and the comparative value of a business will drop.
The good news is there is still time to get to market in front of the curve. To get started, the first step is to think through an exit strategy, which includes establishing the timing, setting an asking-price range, and preparing the documentation needed to maximize the value of your business, as well as considering alternative deal structures to maximize the total amount of money you walk away with after taxes.
If you would like a confidential conversation about how to prepare your business to be sold, feel free to contact me at 888-893-6661 or firstname.lastname@example.org. My LinkedIn profile is: http://www.linkedin.com/in/dolansales.