Some businesses are doing very well this year, others are not doing so well. Is this a good year to sell or should you wait another year?
There are many reasons for selling a business, health, retirement, marriage breakups etc. Sometimes you can delay the timing of your retirement but health, finances or marriage split up may require that you sell now matter if this is a good time to do so or not.
If you have time on your side, then you need to look at many factors to determine if this is a good time to sell your business:
- profitability, have your profits been increasing over the last three years?
- have you received a lot of new business which may be related to the government infrastructure spending? Do you want to enjoy those profits or sell it and give someone else the benefit of those profits?
- has your business been struggling lately?
- are your sales being affected by the economy? Are your sales and profits dropping?
- do you expect them to improve soon?
- if profits are temporary due to infrastructure spending, do you believe that a buyer may not ask why sales have gone up therefore you may get a better price for the business?
- if you spent money in the business to improve sales, would you benefit and increase sales and profitability therefore your selling price of the business would improve? How long will it take for results of this additional spending? Should you wait three years after to show that your success if consistent therefore will continue to reoccur therefore you can get a higher price for your business?
- do you believe that HST will have a permanent effect on your business, if so, should you sell before a potential buyer realizes the correlation of HST and sales could be related?
- do you think your business will be affected by the BP oil spill in the Gulf of Mexico? If you believe that it could impact you, do you sell before it impacts the business or risk losing a lot if you are impacted?
These are just some of the items which you could consider before selling your business.