Thursday, December 11, 2014

Is Now The Best Time to Sell my SW Florida Business?

You’ve thought about selling your business, but you know you don’t have to sell it today. After all, you’ve worked hard for many years to build the value of your business. Sure you want to spend more time with family, friends and feel the urge to travel more, while you’re still young enough to enjoy it. But not at the cost of leaving money on the table, particularly because your business is doing so well right now. You’ve rebounded since the recession, profits are high and work continues to pour in. You, the strong, have survived and endured the challenges the economy brought to Southwest Florida in the late 2000’s and beyond. Now it’s time to capitalize and recapture that money you had to put into the business to stay alive. Just a few more years and you’ll be ready.

So, why now?
We can’t answer that question for you from the personal point of view, you and your family have to make that decision. But, we can offer some insight into the market and what current conditions are like – and the conditions appear to be extremely favorable to business sellers. History has taught us, the best time to sell anything is when there is high demand and low supply: a seller’s market.

Over the last several years, many business owners who have considered selling have held off because of the recession, or in some cases, their rebound from the recession. That trend hasn’t really changed much in 2014 and looks like it will continue into 2015. Therefore, Buyers that truly want to buy, have had thin pickings. This has created a HUGE BACKLOG OF BUYERS, private equity funds and companies searching for business opportunities to purchase. Sounds like a pitch doesn’t it? If you won’t take my word for it, I encourage you to do some research, you’ll be happy you did!! It’s true, individual buyers, private equity funds and companies have been flush with cash and are ready to spend, but only on opportunities that make sense. As are lenders, who need to make deals to stay in business, we continually sit down with lenders and their representatives expressing the need to write loans. We give them what we can, unfortunately a major problem has been, there are limited businesses available that will qualify! The Small Business Administration (SBA) recently increased its ceiling for business purchase loans and most of their approved lenders are streamlining the approval process. Low interest rates also make it affordable by lowering the debt-service payments and putting more cash back into the business, which is what buyers are after to begin with.

Another reason to consider now, rather than later - Baby Boomers!! It has been discussed for years, the Baby Boomer generation is poised to put their retirement plans into action. With the recent recession, the Boomers may have pushed their plans back a bit, so most have not come to market yet. Many Boomers own quality businesses that they, much like you, have spent years developing and will be soon be ready to take those businesses to market. When that happens, the buyer-to-seller ratio is very much poised to shift. When? No telling, but given that the selling cycle for a business can range between 8 months to over 1 year, delaying could have an impact in the selling value for your quality business.

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