This article are provided for information purposes only, and are not intended as legal advice.

Will the oil spill in the Gulf affect the sale of your business?

May 5th, 2010

Everyone is currently monitoring the oil spill in the Gulf of Mexico but does anyone realize the economic implications of the oil spill outside the areas near the oil spill?  It will affect more than just the businesses in the Gulf.  How will affect you, will it cause your earnings to drop, if so, do you sell your business now rather than in a few months?


The oil spill may destroy many businesses in southern United States, particularly those related to the fishing industry.  What about the trucking and transportation industry?  How much revenue was generated from taking products caught and processed in the southern US to other parts of the country.  How large will this oil slick grow to?  Some are having predictions that the oil slick could go into the gulf stream and move up the coast of United States.  If that happens, will ships be able to go into port?  Will supplies be able to be handled the normal way.  What happens if you are dependent on supplies coming from ships and now they no longer have access to a port – ie in Texas?  Does that mean that the goods have to be transported another way?  If they are transported through for example the west coast, what happens to all the businesses servicing other businesses in those port towns?


If you have one such business that may be affected, and you were thinking of selling your business in a few months, why not sell now?  If there is a risk that your business could be adversely affected by the oil spill, why take the risk that business could drop?


From a point of view of the buyer of a business, you know have to think, will the oil spill which will be affecting businesses for many months have a negative impact on the business that you are looking to buy?  If so, should you be paying the price that the business was worth yesterday or should you re-evaluate and offer a different price?  Some businesses may get temporarily more business because of the oil spill, others, will get less.  If you are buying a business today, you have to think, will this business be affected by the oil spill, positively, negatively or not at all and make and offer to purchase that business accordingly.

Filed under: Sell a business — Gary Landa @ 11:02 am

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