Many business owners are apprehensive about the current economic climate and how that could affect their ability to sell and even their life after selling. However, if their business is ready, they have the right advising team on their side, and the market for their business is strong, a business owner’s reasoning behind waiting could actually be more of a risk.
A successful exit can come when a business owner has done due diligence to prepare for an eventual exit. A strong management team, diversification of customers, and strong margins are all qualifying aspects that signify a business is ready to be sold. Additionally, if a business owner is emotionally ready and has plans after selling, they are likely genuinely prepared to move forward.
Sellers can decide to sell their businesses for various reasons, including retirement, relocation, or burnout. Some may also choose to exit if their business has seen a lack of growth or they cannot pivot and adapt to the ever-changing economy and new normal. Selling or staying can be a difficult decision, especially when companies are often a business owner’s most significant personal asset.
Inconsistencies in the economy’s trajectory is a major factor causing sellers to hit the brakes on moving forward. Many business owners look to their future and hesitate whether they will have the capital to support themselves through retirement if the economy declines. However, if a business owner has already prepared their business for a successful exit and has proactively saved for retirement, the opposite could actually be true.
Owners take a risk by waiting. Whether it’s wanting to gain more customers or looking for a little more profit, owners could lose clients in that same period and shrink their overall valuation. Additionally, owners are placing more risk by keeping an illiquid asset rather than capitalizing on their current position and selling. Sellers gain liquidity from selling and can potentially reinvest some of their new assets into a stock at a lower purchase price because of the economy’s state.
An experienced, well-equipped Advisor Team is key to a successful sale. If a business is strong and has all the proper qualifications for a profitable sale, Advisors will be able to market the business to various buyers successfully. These circumstances would increase the likelihood of reaching the seller’s goals and allow them to retire comfortably without the burden of a fluxing economy.
At Aberdeen Advisors, we take steps to maximize all aspects of a business and leverage our network of professional connections to find the right buyers and meet sellers’ goals. If you’re considering selling or want to learn more about how you can position your business to maximize value, feel free to contact us for a complimentary consultation.