Have you ever noticed that firefighters always back the fire trucks into the fire-hall?
Do you wonder why they don’t just pull into their parking spot hood-forward like the rest of us?
It is because backing into the hall at the end of a shift saves them time when they have to respond to a call. They back in so that they are ready; whether the call comes in 5 minutes or 5 days, they must be prepared to get those trucks out of the hall and on the road as quickly as possible.
As a business owner, you are like a firefighter: you always need to be prepared.
Consider the graphic below from Sellability Tracker. The proportion of business owners receiving offer to buy their company fluctuates over time but is up from Q1 2016.
The proportion of business owners getting an offer from a potential buyer is an important statistic because it measures one half of the equation of a business sale. For a transaction to take place, there must be both a willing seller and a willing buyer.
Statistically speaking, the two most common reasons for you to become willing to sell your business are:
- a health scare, or
- an unsolicited offer to buy your business.
Neither of these circumstances can be predicted, but you need to be prepared.
Companies become more acquisitive when they have access to more cash than required for day-to-day operations. That was the case following the liquidity crisis of 2008; interest rates were incredibly low, and companies cautiously maintained profits on their balance sheets for a rainy day.
In years when companies don’t have a lot of excess cash to acquire other businesses, attracting potential buyers means businesses have to offering high value in return for the cost of the investment.
No matter which scenario you face, being prepared means having a sellable asset when opportunity strikes. You always need to operate your business as if a potential sale is just around the corner. Companies that are disorganized, have shoddy bookkeeping, too much customer concentration or are run by a hub & spoke manager will end up being passed over in favor of turnkey operations.
The time is now for you to get your company ready to showcase when opportunity comes knocking.