Should I Sell My Business In 2017?

Should I Sell My Business In 2017?

Posted on March 07, 2017
Smart business owners not only know how to grow a profitable business, but they also know when to cash out and sell it. Everyone knows the best time to sell is when things are going great. †But how can you tell if the time is right? †Here are few ideas from a business broker: †

Economy: Selling a business during good economic times results in a higher selling price. †Buyers are more likely to take risks during a flourishing economy. †A shaky economy quickly sends buyers to the sidelines. †Itís also easier for buyers to find the necessary financing to make the purchase. †If interest rates go up, financing is more expensive and that leaves less money available for the business purchase.

Sellerís Market: In Indiana, itís certainly a sellerís market. †There are more available buyers in the market than there are businesses to sell them. †The law of supply and demand in the market has increased selling prices. †However, itís forecast that tons of baby boomers will be selling their businesses soon. †If this occurs, the average selling price for a business is likely to decline.

Financial Performance: †Businesses are typically sold for a multiple of profit over the last few years. †The most recent year is weighted the highest. † If the profitability of your business has increased lately, itís likely at its most valuable now. †Weíve seen these multiples of profit increase steadily since 2010, but they have plateaued recently. †One bad financial year can significantly impact the selling price of the business and make it difficult for a buyer to find financing to purchase your business
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Personal Situation: Owning a business is risky. †Any number of things can happen to reduce the value of your business. †Many owners contact us when they are ready to reduce their risk, take money off the table, and diversify their investments. †Other owners contact us when they are ready to do something else. †Youíve put a lot time, energy, and resources into your business. †Is there a new adventure awaiting you?

As a seller considering an exit from your business, you need to not only look at the performance of your company but also the business environment. With affordable financing available to buyers, strong valuation multiples in the market, and more buyer than sellers, now might just be the best time to sell your business. †