There are many factors to consider when assessing the right time to sell a business. The past year has been especially challenging due to the economic impacts brought about by the COVID-19 pandemic. Final Ascent helps business owners adequately review the overall market situation and the state of their business before finally deciding whether or not to sell it. Needless to say, market analysis is one of the most important steps combined with a thorough examination of how the future looks for the industry the business is in.
Some of the things that owners should consider when thinking about selling their business are their competition, financial performance, personal circumstances and economic stability among others. Final Ascent is well aware that analyzing what is happening with the company’s competition is of utmost importance to see if it is keeping up with other players. If the business is outperforming others and unique to its competition, it can definitely be sold at a higher price. It would be advisable to also look into new entrants in the owner’s industry that pose a threat to the business, companies that leverage new technologies and delivery systems. Competition for deals continues to grow, and there is an observed demand among buyers despite the ongoing effects of the pandemic post-vaccine while the supply is relatively low. Such a trend should be taken into account as well as the ongoing health crisis still has rippling effects across industries.
Buyers want to acquire a secure company that has a track record of strong financial performance. Therefore, it is a must to keep accurate accounting records to show potential buyers that the business is not only surviving but is actually thriving. This improves its sellability, showcasing a positive growth trend within the industry.
Another reason to sell may be due to personal needs or circumstances. If handling the business is not something the owner enjoys anymore, selling is a much better alternative than slowly burning off hard-earned enterprise value. There are also cases where an owner is involved in several businesses simultaneously, and the growth and scale of a new business venture dominates the owner’s time and attention. This indicates that it is high time to consider selling the legacy entity.
Meanwhile, economic stability is never going to be certain with how industries are slowly adapting and recovering today. Interest rates are still at record lows, which means the cost to borrow funds to buy businesses will inevitably increase over time, increasing the cost of debt financing business acquisitions. There is also the potential for higher tax rates which should be considered especially for business owners who are planning to retire. Final Ascent advises their clients to never leave the decision of selling their business to chance. There is a right process to navigate through this tricky phase, considering the different push and pull factors.
To know more about their services, visit their website now at https://finalascent.com/.
About Final Ascent
Final Ascent has decades of experience servicing lower middle-market companies as they go through their exit journey. Each path they create is tailored to their client’s needs, and they guide business owners through their proprietary systems and processes. They are a team of true experts who are masters in their respective fields all with the same goal of getting their clients to where they want to go and using their business as the vehicle to get there.