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? If you have reviewed the pros and cons but still can’t decide whether or not to hit the eject button, here are six reasons for you to consider getting out now.
- You’re less interested in fighting the good fight
The Great Recession hit a lot of businesses hard. If you felt the negative repercussions, got your business stabilized and now the prospect of having to fight through another recession leaves you panic-stricken, it could be time for you to get out.
- The worst is behind you
Perhaps you were mentally ready to consider selling a few years ago. Then 2008 hit. And 2009 was bad. And in 2010 and 2011 you were still making cuts and adjustments, and now you’re finally starting to see some profit and revenue growth. While your numbers are going in the right direction, it might be just the right time to make your move.
- The tax man is coming
Governments around the world are looking for money to fund the costs associated with aging populations. At some point this is likely to mean increased business taxes.
- Nobody is lucky forever
If you’re lucky enough to be in a business that actually benefits from a bad economy, then congratulations: you’ve probably just had the four best years of your business life. But no cycle lasts forever and right now might be a great time to cash in your chips.
- The coming glut
Demographic projections are not in favor of business owners. Baby boomers have started retiring in droves, meaning an impending glut of small businesses will becoming on the market. That’s great if you’re a buyer but if you’re a seller, you may want to avoid the flood and head for higher ground now.
- The closing window
Since 2008, it’s been more difficult for private equity companies to raise money, so many firms had their last successful round of fundraising a number of years ago. Many of these funds have a five-year window in which to invest or they are required to return the money back to the people who invested with them. Some 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 (earnings before interest, taxes, depreciation and amortization). If you are one of the lucky ones in the seven-figure club, you could get a bidding war for your business going among private equity buyers keen to invest their money before they have to give it back.