With the economy showing signs of strengthening, it appears business owners are jumping to sell their business. The recent article by AP Journalist Joyce Rosenberg, “Retiring boomers driving sales of small businesses” supports the notion that the market is going to have an increase in sellers. B2B CFO® calls this the Tsunami effect.
The Exit Strategy Handbook presents valid statistics on the upcoming volume of businesses that will need to be sold. Only the strongest will get the best price. Planning and working now to improve the “saleability” is essential.
By starting now, owners can increase the value of their business by improving margins and completing the Advanced Due Diligence Process™. Rosenberg’s article highlights that buyers want deals that can close quickly. If sellers can work through all the due diligence items before the sale courtship, the deal will close faster, at a higher price and with less risk of the business value declining during the actual due diligence process. Declining financial performance is the number one reason why deals fail during the due diligence process.
In planning for the sale of your business consider shoring up your employee and management team, customer information, vendor relationships, technology compliance, financial statement presentation, tax planning and insurance programs.