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Why there may never be a better time than now to sell your business

by Mike Ainsworth

Why There May Never Be A Better Time Than Now To Sell Your Business

 

In my experience, it’s not unusual for business owners to leave it too late to sell their business.

 

In an ideal world the best time to sell is when your business is trading profitably, business is on the increase and the economy is booming.  So after four years of Brexit and 12 plus months of Covid, it’s easy to see why a lot of business owners are putting off an exit decision.

 

In reality, there may never be a better time to sell than now. Or at least to commence the sale process.

 

Why do I say this?

Well firstly because buyers are more interested in whether your business has the ability to bounce back from any Covid setbacks than the performance of the business during Covid.

 

Secondly, it may turn out to be a buyer’s market right now but in reality, there are fewer good businesses around than usual so if you have a quality business you are sure to attract interest.

 

Furthermore, there are currently plenty of cash buyers around looking to invest in quality businesses. Interest rates are low and entrepreneurs are looking for a good home for their investment. Whilst some may argue that selling prices will fall, I would come from the position that if your business has survived such an unprecedented time, then the risk of ownership should be lower and therefore the sale price higher.

 

Finally selling a business can easily take twelve months or more from instructing a broker through to completing a sale. In the present market that even 12 months can seem quick. If you add any preparation time to that and you are looking to exit in the next two years then the sooner you start the process the more likely you are to complete it in your target time frame.

 

Here’s my three point strategy to start to get your business market ready:

 

(1) Prepare in-depth and transparent financials

Buyers will want to know how your business performed before Covid. In many ways, I consider this is the key metric although you should also be able to demonstrate how the business performed during Covid, what steps you have had to take during the pandemic and most importantly how you anticipate the business will perform going forward. It’s almost impossible I think to over-prepare the financial analysis and, if you don’t, buyers will assume the worst.

 

(2) Explain how you have dealt with the Covid impact and how your business will thrive going forward

Your business may have performed well over the past 12 months or so but you will almost certainly have taken steps to mitigate the Covid issues and you should be able to explain these in some depth. You will also need to provide estimates going forward and describe how the business can take advantage of the post-pandemic market.

 

(3) Start Preparing Due Diligence

It’s never too early to anticipate questions that will arise during due diligence and you should check business and employment contracts, leases, Intellectual Property, operations manual, outstanding disputes, list of business assets.

 

In summary if you want to sell your business in 2021/22 now is the time to act. There are good buyers out there and they have cash to fund acquisitions. In the present market buyers may be cautious and more demanding and it’s therefore important for you to get your support team together at an early stage.

 

If you would like to talk to me about selling your business then please call me on 01908 904555 or email me on mike.ainsworth@salesmasterguild.com

 

Mike Ainsworth

Mike Ainsworth is a Sales Masters Guild Personal Business Mentor

 

Mike lists his three main strengths as: Having an analytical approach to problem solving, being commercial and understanding value, having compassion and deriving real pleasure in being able to help people’s business's to thrive and flourish.

 

Find out more about Mike on his Sales Masters Guild profile page

 

Read more blogs from Mike.

 

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