Want To Sell Your Business? Then Buy A Business

The recession has hit many sectors, industries and businesses. Some businesses have deliberately contracted cutting their operations and costs in order to survive with a related reduction in turnover; others have had this forced on them by the market.

Many business owners are holding off selling their business until they return to previous levels of profitability, and perhaps they are right in doing that. When you are selling a business, profit and the size of the business is everything. A small business where the owner is simply making a wage could be worth nothing, or at most two times its profit. The larger the business becomes, the multiples someone is willing to pay increases.

So if you own a business and find yourself in this situation of wanting to sell but not believing that you business is worth enough what could you do?

You could accept the lower price, or trade your way out of it of course; another alternative would be if you wanted to sell your business for a good price is to buy a business.

You can buy competitor, and incorporate their turnover into your business, but because you are using your existing infrastructure a good proportion of the costs will disappear increasing your profitability.

Or buy a business or two in slightly different locations and create a chain, re-branding those businesses.

In other words you speculate to accumulate, a £40,000 investment now, could result in a much larger return a matter of a few months later. One time when 1 +1 = 3

This entry was posted on 04/06/2009 at 09:49 am and is filed under Selling Your Business, Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.