Have you been thinking about selling your business but just can’t decide if now is the best time? Do you find yourself repeatedly analyzing the economic situation and wishing you had a crystal ball? There are positive signs and there are negative signs.
If you’re still up in the air and can’t quite decide whether or not to hit the eject button, here are six reasons you might want to consider getting out now.
1. You’re less interested in fighting the good fight
A lot of business owners took the Great Recession in the teeth. Many others were devastated by COVID. If you’ve got your business stabilized and the prospect of possibly having to fight through another recession leaves you panic-stricken, it could be time for you to get out.
2. The worst is behind you
Let’s say you were mentally ready to consider selling but then a downturn reared its ugly head. You made cuts and adjustments, so now you’re starting to see some profit and revenue growth. With your numbers going in the right direction, this might be the time to make your move.
3. The tax man is coming
Governments around the world are looking for money to fund the cost of an aging population. At some point this will mean increased taxes.
4. Nobody is lucky forever
No cycle lasts forever and right now might be a great time to take some chips off the table.
5. The coming glut
As a business owner, demographics are not on your side. As baby boomer business owners retire in droves, we’re going to have a glut of businesses on the market. That’s great if you’re buying; but if you’re a seller, you may want to avoid the flood and head for higher ground.
6. The closing window
It’s been tougher for private equity companies to raise money, so many firms are well past their last successful round of fundraising. Many of these funds have a five-year window in which to invest or they have to give the money back to the people who gave it to them. Boutique private equity firms will make investments in companies that have at least one million dollars in pre-tax profits (larger private equity firms will not go below $3 million in EBITDA), so if you’re in the seven-figure club, you could get a bidding war going for your business among private equity buyers keen to invest their money before they have to give it back.
