Why now might be the best time to sell a business

Wednesday, 17 October 2012, 3:03 pm
Press Release: nzbizbuysell.co.nz

Why now might be the best time to sell a business

Unsure markets, less spending, tougher times and tighter money have seen a drop in business for sale listings as those who would have normally listed their business for sale hold back; working the cash flow, waiting for improved profits and a more buoyant economy.

While the decision to sell your business needs careful thought and planning, there are a number of reasons why you may want to move sooner than later:

1. Under Supply – Like with houses, it’s easier to sell a good house, and get a good price when there are limited numbers on the market. There are buyers with the money looking for good, stronger businesses now.

While there are still many opportunities out there, there has been a drop in quality listings. “Good businesses are selling. Buyer traffic has been relatively stable, however buyers are more discerning and comment on the lack of quality businesses that are on the market” says Richard O'Brien from Business for Sale website nzbizbuysell.co.nz

2. Improved Profits – a number of business owners are reporting improved sales and income. Having cut expenses and adapted their business model in order to survive the last three years, many businesses are now lean, mean and well placed for buyer scrutiny.

3. Buyers are out there – There are corporate buyers, private groups and individuals with significant funds looking to put it to use through strategic acquisitions and business investments. If you own a healthy and profitable business then it’s a seller’s market for you – banks are still interested in strong businesses.

4. Holding on too long – Some business owners will grow tired and lose the passion for their business before they get to sell. Loss of interest can see a decline in business, as businesses take energy and attention to keep them in shape. Waiting too long with hope alone won’t make your business more desirable. Often it’s better to cash-out than burnout, and start enjoying life once again.

5. Baby Boomers exiting en masse – New Zealand has a huge number of self-employed people and a large percentage of these people are from the baby boom generation. As this generation start to sell and step away from their businesses, a smaller supply of generation of X’s will be seeking to invest. Unfortunately an over supply of average businesses is likely to result in a number of businesses failing to sell.

If you are considering cashing up and selling your business now or even in three years time, then you should start planning to ready your business for sale to maximise your chances of a sale and to get your best return in what could become a crowded and competitive marketplace.

Plan your business exit – groom your business for sale. Ensure all systems and procedures are documented and in place. Make sure your financial records reflect a healthy and strong business that someone will want to buy.

For more information on selling your business visit www.nzbizbuysell.co.nz

ENDS

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