As we enter a new stage of the pandemic and businesses resume operations, there remains a lot of uncertainty, especially for small business owners. Prior to March, business owners were exiting their small businesses at record rates.
For small business owners ready to sell soon, all indicators pointed toward plenty of opportunities to do so for maximum profit and retire. As a team of experienced business brokers, many are asking us if that’s still possible today. The answer is that it depends on your situation.
Some small businesses are selling at record numbers and in high demand, while others would be best served waiting a year or two to build that demand and interest back up to where it was pre-pandemic. Contact us for data regarding your business and if now is the best time to sell.
Selling in the Next 6 Months
For those considering selling immediately, be sure to get a business valuation first. As these are based on historical financial data, there is a good chance that your valuation will be lower than it would have been at the first of the year.
Of course, this does not apply to all businesses. In fact, essential business and online retailers have seen huge surges in the past couple of months. For other small businesses, it may take a few more months to recover.
Some business owners are also ready to close their doors for good as they no longer have the energy or passion to pour into a comeback.
Our recommendation is to secure a confidential opinion of value to make a final decision about whether or not now is the time to sell your business.
Selling in the Next 24 Months
Business owners who are looking for a later exit date have a greater opportunity to reopen and recover over the next two years. Those who can pivot and adjust may find their business both growing and shrinking during the rebound period.
Here’s how to be in the position to sell in the next year or two:
- Clean up financials and paperwork – now, more than ever, is the time to reexamine and organize your books. Are there unnecessary expenses that can be trimmed? Is your record keeping up to date?
- Get solid systems in place – Refine the operational systems in place. From marketing to management, focus on creating a business model that is transferable to a new owner. Not only will it help your business grow now, it gives potential buyers the confidence that they could run it when you are gone.
- Find a business broker – Working with an experienced broker will help you establish your goals and stay on track to meet them when it’s time to sell. Since a business sale can take as long as 6 months to finalize, find the right broker early on in the process. They will be an invaluable resource about the business market, potential buyers, and industry trends.
Though the past several weeks have brought unparalleled challenges for business owners, many are finding ways to embrace new opportunities and have an optimistic outlook on recovering in the coming months.
If you are unclear about if now is the right time to sell your business, contact us today for a free consultation. We do not accept any upfront fees and only receive a fee if we sell your business, no strings attached.