Why Sell Your Business?
Bill Warner Thursday, May 14, 2009
This is a real bad time to sell your business. Valuations are falling as you can read about in Mike Handelsman’s article in Entrepreneur.com and the gruesome details at www.bizbuysell.com.
The Sales Decision Dilemma
This might not be intuitive at all. There’s a good chance your revenue growth has declined in the last couple of quarters. Your profits might be a lot smaller as a result. Your credit may be declining as banks reassess their risk. We are reading all this bad news every day. The dilemma is in deciding if you should sell now before the economy worsens, or ride it out and get a much better valuation when the economy recovers.
Should You Sell Your Business?
It seems to me that if your business has been strong then you have a good chance of pulling through this mess. Continue to manage your business with heightened discipline and come out of the economic decline even stronger. You then can sell your business at the much higher valuation it deserves. You have worked too hard to sell your business at bargain basement prices.
If your business has been weak, then it will not be an attractive purchase opportunity for any buyer. If your business is weak because there is no viable market for your products and services then you do not have a company worth buying by anyone. If your market is attractive but you are not managing your business well, you need to fix the business before you sell it. Your mismanagement will reveal itself in due diligence and you will get an even lower valuation as a result. This is because the buyer is taking much greater risk and is going to have to fix the business after the purchase. You should fix it yourself.
A Reason To Sell Your Business
The only reason to sell your business now is for personal reasons. You may just want out of the business at any price because you have lost the passion for it. You may have a dire personal situation that prevents you from paying attention to the business. You don’t have the energy or know-how to save your business from eminent failure and want to get anything you can for it.
But, if you still have the passion and the energy, keep going and weather this storm. Be one of those people that get going with the going gets tough.
Filed Under: Business Operations, Managing Business Financials, Business Strategy and Planning
Bill Warner is the Managing Partner of Paladin and Associates, a business consulting firm in the Research Triangle Park area of central North Carolina, and is the Chairman of the Triangle Accredited Capital Forum, an angel investor network with over one hundred members throughout the southeast.
Bill Warner is the Managing Partner of Paladin and Associates, a business consulting firm in the Research Triangle Park area of central North Carolina, and is the Chairman of the Triangle Accredited Capital Forum, an angel investor network with over one hundred members throughout the southeast.
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