Why 2019 is the Perfect Time to Sell Your Business
Business owners are surprisingly predictable when it comes to selling their companies. When revenues are rising and money is cheap; they delay. This can have serious consequences when the market turns. Every business owner will exit their business someday. The decision to sell is often both personal and financial. The personal reasons can vary widely, but here are some proven reasons why you should consider selling right now written by one of our fellow colleagues Alan Horwitz:
- A Recession is overdue and projected for 2019. Signs include interest rate hikes, fluctuations and corrections in the stock market, yield curve inversion, trade wars and other factors.
- Not Selling Now could be a significant mistake. A recession will create Buyer anxiety, less funding and less demand. Interest Rates are rising. This will eventually restrict borrowing & reduce the buyer pool.
- Sell Now, from a Position of Strength – Revenues and Earnings continue to be up. However, one down year can cause a three-year delay in a sale as buyers and banks like to see 3 years of stability and growth.
- Capital continues to be readily available with SBA & traditional lenders still being extremely aggressive.
- Taxes are now lower under the new administration so you will earn More After Taxes.
- Sale Prices & Multiples of Discretionary Earnings have risen in 2018 to Historic Highs and Sellers are achieving 93% of Sales to Asking Price.
- Strategic buyers, large and small are well funded and continue to grow through acquisition. Buyer demand continues to be extremely high with Sales Prices up 10.7% over last year. Buyer inquiries at Sunbelt continue to break records. Buyer confidence has been boosted by the economy, the increased revenue and profits of the businesses being sold and affordable deal financing.
- It is still a Seller’s market as buyers out-number sellers. However, this is expected to change soon and there are clear indications are that we are on the verge of a recession.
- Likelihood you will get an offer continues to be up significantly over the benchmark average.
- Closed transactions are up 3.7% over last year and Closed Transactions reached record levels in 2018. Brokers reported the highest number of businesses changing hands since BizBuySell started tracking data in 2007. This growth continues to be credited to Baby Boomers who are reaching retirement age.
- Other Trends include higher offers for companies with management teams in place, with reoccurring revenue, in growing industries, where there is obvious upside potential and the highest multiples go to the companies with the highest revenues and profits.
- Continued Optimism by both Buyers & Lenders makes this the Perfect Time to Sell Your business.
At Sunbelt Business Brokers and Sunbelt Business Advisors closings are up significantly over last year and average sale prices are up, driven by higher multiples, better financing and companies with strong earnings. There is no perfect time to sell, but the conditions are extremely favorable right now and the risks of waiting are growing. If you are thinking about selling, now is the time to consult with Sunbelt Business Advisors, to be educated on what you can do to maximize your selling price and to help plan for an exit when the time is right for you. Timing is Everything!
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