If you’re a business owner, the last thing you want to think about is a future decline in the economy. An economic downturn means loss of profitability and can significantly jeopardize your business. Staying positive and motivated despite the possibility of an economic downturn keeps the business afloat. But what if you plan to sell your business within the next few years? Have you mapped out an ideal time for the sale of your company? Selling at the wrong time could decrease the value of your business and you could potentially lose money in the end, so when is the best time to move forward with your exit strategy? If your business is doing well, now might be the quintessential time to sell.
“Business is great! I don’t want to sell now. Call me in a couple of years.”
This is the response we often hear when contacting business owners. With business and consumer confidence at new highs, most small businesses are enjoying strong activity and growth. So why would anyone want to exit now?
We understand how you feel. However, let me assure you that can be the best time to sell your business. That’s when you can typically show progressively higher sales and profits, which translates into a higher valuation for your company. Buyers gravitate to companies with this sort of track record. No one’s interested in a business with flat to declining sales, unless of course they hope to steal it from you.
At Lisiten Associates, we represent the business owner in valuing and selling their company. The first step in our process is conducting a comprehensive valuation—free of charge or any obligation. During our analysis, we’ll see opportunities to increase the value by implementing just a few relatively simple things. The biggest, perhaps, is to stop managing the P&L in a way that minimizes taxes in favor of seeking ways to maximize net income. After all, the higher the EBITDA (earnings before interest, taxes, depreciation, and amortization), the higher your valuation will be.
So yes, business is good right now. But while you ride the wave, take the time to have your company valued. What you learn could add 10’s or 100’s of thousands to your selling price when you ultimately decide to exit. Lisiten Associates can provide you with a complimentary valuation and a short list of needs to begin your valuation.
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