Have you been thinking about selling your business but just can’t decide if now is the best time? Do you find yourself repeatedly analysing the economic situation and wishing you had a crystal ball? There are positive signs and there are negative signs….
If you’re still up in the air and can’t quite decide whether or not to hit the eject button, here are six reasons you might want to consider getting out now.
1. You’re less interested in fighting the good fight
A lot of business owners took the Global Financial Crisis in the teeth. If you’ve got your business stabilised and the prospect of possibly having to fight through another recession leaves you panic-stricken, it could be time for you to get out.
2. The worst is behind you
Let’s say you were mentally ready to consider selling a few years ago, and then 2008 hit and 2009 was bad, and in 2010 and 2011 you made cuts and adjustments, and now you’re seeing some profit and revenue growth. With your numbers going in the right direction, now might be just the right time to make your move.
3. The tax man is coming
Governments around the world are looking for money to fund the cost of an aging population. At some point this will mean increased taxes.
4. Nobody is lucky forever
If you’re lucky enough to be in a business that actually benefits from a bad economy, congratulations… you’ve probably just had the four best years of your business life. But no cycle lasts forever and now is the right time to get out.
5. The coming glut
As a business owner, demographics are not on your side. As the baby boomers start to retire in droves, we’re going to have a glut of small businesses coming on the market. That’s great if you’re buying; but if you’re a seller, you may want to avoid the flood and head for higher ground now.
6. The closing window
Since 2008, it’s been tougher for private equity companies to raise money; so many firms had their last successful round of fund-raising a number of years ago. Many of these funds have a five-year window in which to invest or they have to give the money back to the people who gave it to them. Some boutique private equity firms will make investments in companies that have at least £1 million in pre-tax profits (larger private equity firms will not go below £3 million in EBITDA); so if you’re in the seven-figure club, you could get a bidding war going for your business among private equity buyers keen to invest their money before they have to give it back.
To get an assessment of how saleable your business is or if you want help growing your business or in preparing it for sale, contact Richard Wickes or contact us via the link below.