Let’s look at a scenario where a small business owner has come to you, as a friend, for advice.
He is considering selling his business, but isn’t sure that the time is right.
His business is currently very profitable, and although his health is good – retirement needs to be in the picture sooner rather than later.
The economy looks good, and business is booming.
Should he stay in the game to maximize his earning potential or should he sell while the business is at its peak? Could he make more if he stays in the game for two more years and then cashes in?
What would you advise this business owner to do?
You would probably advise him to stay in the game, why leave a business that is making you serious money, right?
We left out a major detail here, it’s 2007… Now what would you tell this owner to do?
The point of this exercise is to highlight that the best advice in this situation, the advice to sell, can only be given with the power of hindsight. In 2007 this business owner likely had no idea of the economic disaster that was about to come his way. For the businesses that survived the recession, and many did not, it has taken many years to get back to their 2007 numbers if they have at all.
Sometimes the best thing you can do for the investment in your business is sell while the selling is good. Gambling with what the future might hold for your business could end up meaning what it did for those who were trying to sell their businesses in 2008 as opposed to those who were able to sell in 2006. It is far easier to sell a business that is doing well than one that has taken a major hit or is in a downward slide.
This decision can be an agonizing one, but if selling your business is something you are considering doing in the foreseeable future, now might be the best time.
Have a serious talk with an experienced and qualified business broker about how your industry is doing, what comparable businesses in your area are currently selling for and about whether it would be advisable to sell your business now while the chances of making a great return on your investment are really quite good.
Thinking about selling, but you’ve been waiting for the right time? Curious about what other business sellers in your industry were able to get for their businesses? Ask us! Please leave a comment or question here, and we would be happy to help you with any selling questions.
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