Is the recession ending - should I sell my business now?

It is generally accepted that you should sell your business when it is doing well rather than when it is doing badly. Hence business owners during the recession, unless circumstances have forced them to do so, have delayed putting their business on the market.

Official statistics indicated that for the quarter ended June 2009, the UK was still in recession, however increasingly I now talk to business owners who tell me that for them their turnover has now increased.

So how long would a business owner have to wait to obtain a good price for their business after this recession?

Ideally a business owner should be able to show a number of years of increasing turnover and profitability, however business owners often cannot wait that long, they may be close to retirement age, or simply have to move location.

At this point it would be appropriate to remind the reader that when selling a business an owner is selling the next couple of years profit, so in a way historical information is irrelevant.

Looking at historical financial accounts and making a decision as to a businesses value is like looking at photographs of a potential partner on a dating website when they were a child and making a decision as to whether you would like to meet them!

No, a business should be able to achieve a higher price for their business as soon as they can show that their sales and profitability has improved. So a seller should present to a buyer recent Management Accounts, copies of Vat Returns, Order Books etc showing these improved trading figures.

So the business owner has to prepare their business for sale by providing up to date information if they want to obtain a good price for their business. And as long as they can do this, a Business Transfer Agent should be able to present the business to obtain that good price.

If they do not provide this information they will have to wait for these historical figures to prove that what they are saying is simply not a verbal spin.

This entry was posted on 31/07/2009 at 11:32 am and is filed under Selling Your Business, The Economy. 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.