Now is a Good Time to Sell Your Business
If your business has survived the economic downturn triggered by the pandemic, selling might be the last thing on your mind.
Perhaps somewhat unexpectedly, this could well be an excellent time to sell your enterprise! Although it might feel counter-intuitive to sell a business in such uncertain economic times, the reality is that you stand an excellent chance of finding a suitable buyer!
Here we take a closer look at why now might be the time to cash in on the equity you have built.
The Tough Stuff Is Yet To Come
During the pandemic, many businesses were adversely affected. Unable to trade at all, or only trading at a reduced level, dwindling profits combined with staffing concerns, social distancing regulations and significant changes in customer bases means that the majority of businesses now face an uphill battle back into the black! If your business has a reasonably healthy financial profile, selling it now, before the recession and its associated problems begins to bite, could be a good way to emerge a winner in an uncertain business environment.
Plenty of Potential Buyers Out There At The Moment
For large numbers of employees (or business owners in certain sectors), the pandemic has spelt the end of working life as it was. Hundreds of companies are making people redundant, particularly in the banking, tourism and professional services sectors. Self-employed enterprises and owner-run businesses are also failing at an unprecedented rate. This means that there are literally thousands of people out there without a job, who may well be considering running a business as their next career move. The nature and scale of redundancies and business failures is also such that a significant number of people facing unemployment have the skills to run a business successfully.
Many People Have the Money to Buy A Business
One of the few advantages of getting made redundant is the redundancy money awarded. Particularly for employees of long-standing, it's possible that their payout could run into hundreds of thousands of dollars. For many people, the payout puts them in a once-in-a-lifetime financial position to buy a business. A selling environment where so many people with cash to burn and the opportunity to make a new business their next venture are available is unlikely to come round again any time soon. If your business is in reasonable shape, selling now definitely enables you to take advantage of a sellers' market.
Think about the Options
There may be a buyer closer than you think. You may want to consider some competitors or related businesses in your area. Intangible assets such as large customer mailing lists or well established brand names or logos are often highly valued by similar businesses wishing to gain a larger slice of your particular industry sector.
Long term senior staff may also be a not-so-obvious source of a buyer. Many successful businesses have grown out of a dedicated employee whose greatest wish was to own the company some day.
Finally, don’t underestimate the value of any property component you have attached to your business. A neighboring business might have always had an eye on your parking or warehouse facilities and be willing to pay a premium to get their hands on them.
The Bottom Line
If you were planning to retire or were thinking of selling your business in order to pursue other projects, now could be the perfect time to take the plunge. Diminished employment opportunities, large redundancy payouts and a unique, post-Covid marketplace combine to form an environment that is ideal for selling at an advantageous price. Although there is a natural tendency to want to hold on to a business, particularly if you have managed to steer it safely through a challenging period, it's probably the case that now is a good time to pass it on to another owner, before the post-pandemic economic landscape becomes too grim.
About CEO Strategic
CEO Strategic are an established business consultancy firm. Since 2004, CEO Strategic has Advised, Expanded, Restructured, Turned Around or Exited (Trade Sale, ASX & NASDAQ ) 100 + Businesses and raised over $500 Million in Equity & Debt. Specializing in practical, proven solutions for common business situations, utilizing proven techniques that align with ‘best practice’ Private Equity & Corporate Advisory standards.