The Time Is Right to Sell Your Biz
If you’re considering selling your business anytime in the next few years, a franchise business broker has this piece of advice: act now, because we’re at the top of the cycle of this continued but can’t-last-forever seller’s market.
While I don't subscribe to the idea that we’re in for a massive recession in the coming years, a slight correction is certainly possible—and that’s not even talking about potential election ramifications. Signs of these very good times are all around—long-vacant storefronts filled with bubble tea shops or, in my neighborhood, a live-action Riddle Room. And check out the deals being thrown around by car companies on TV. Just like I reported back in 2005, any time you see car companies throwing out absurdly huge discounts to move volume, watch out.
All that possible/future doom and gloom aside, times are excellent for owners of businesses looking to cash out or move on to the next big thing. With a steadily improving economy, most small businesses have several years of healthy, growing sales to report, which means business valuations are at or near their peak.
Credit is relatively free flowing and interest rates are still near historic lows, so it’s easier for people to buy their first business or finance the purchase of an additional business location or category.
Looking further ahead, though, there’s a possible really big iceberg on the horizon—of course, it’s the baby boomers. As the boomers as a group decide to give up the 9 to 5 in favor of retirement, it’s very likely there will be a massive glut of businesses on the market, sadly awaiting their next owners.
There’s only so much Sarah McLachlan can do, but here’s hoping she’s already in the studio working with a bunch of doe-eyed company GMs tempting new owners to get off the couch and dial the number.
It’s important to live in reality and understand that the economy’s doing pretty well, but it’s equally important to be strategic if you’re a business owner that’s eventually going to want to cash out. You should have a reputation with a broker, you should limit how many personal expenses are added onto your P&L, you should create at least a rough succession plan and you should take some advice from Kenny Rogers and know when to play your hand.