Maximizing Your Sale Price When Baby-Boomer Businesses Flood the Market
Remember 2019? Things felt pretty stable and dependable, didn’t they? Like many baby-boomer business owners, you were enjoying the ride when it was smooth sailing, but 2020 might have you ready to move on. But what about all the business owners thinking the same thing? Won’t a crowded market drive down values?
The good news is that while there might be more businesses hitting the market in the coming years, the same principles of value apply. If you can maximize basic value drivers, your business will stand out from the pack and you can command a premium sale price.
- Cash is still King: Just because there will be more businesses on the market, doesn’t mean all will actually sell. As has always been true, those businesses that show strong profitability attract interested buyers. Plain and simple. Begin the steps today to ensure that your company is maximizing profitability and that the books and records clearly demonstrate this.
- Curb Appeal is not just for Houses: Clean things up. If a potential buyer for your business is looking at a few different purchase options, make yours sparkle. This means both that you get your systems and processes documented and in order, as well as your physical facility cleaned up and running smoothly. A buyer should leave a showing confident that your business is well run and could be easily transferred to a new owner.
- Prepare for the Give and Take of Deal Making: As a deal to sell your business starts to take shape, remember not to take things too personally, and utilize the buyer’s desires as a way to also get what you want. If price is your main objective, perhaps you are flexible to give them the closing date they prefer. If there is a point a buyer must have, use that as an opportunity to get what you want, or to commit the buyer to your business.
Don’t be overwhelmed by the thought of baby-boomer owned businesses coming to the market in one great wave. While the laws of supply and demand might hint that a buyer’s market scenario would drive prices down, I believe this assumes all businesses to be equal. If you work to make your business stand above the rest, I know the coming years will be a great time to sell your company.