Planning to Sell Your Small Business? The Time Could be Right

601px-American_Cash–public domainThere are four words that I’m always listening and looking for in the news. And when I hear or read those four words, I go into “pay-close-attention” mode. Those four words are:

“…more businesses plan to…”

These words are important because they mean that some survey firm has talked to business owners about their actual plans. They didn’t ask consumers how they are “feeling” about one thing or another, which often is more of a reflection on a person’s mood than anything based in reality.

Businesses need to map out their moves in advance, so if they are planning to to something, it indicates seriousness.

Confidence is up

So this is why I perked up a bit when I read a headline declaring that more small business owners were planning to sell their businesses at a good price in coming months. The headline was based on a survey that was released recently. Further, compared to last year, there are 20 percent more prospective business sellers who are “very confident” they’ll get an acceptable price than they were last year. Overall, 63 percent of sellers expressed general confidence that they will get an acceptable price.

However, all trends – like politics – are ultimately local and it doesn’t really matter very much what 63 percent of people you’ll never meet are doing or thinking; the important point is what you believe and what your plans are.

Are you considering a sale? If so, perhaps this general confidence in the market is exactly what you need to move forward with your plans. The important determining factor is what is giving these owners the confidence to sell. The main reason is pretty simple: improving business financials have given rise to increased confidence.

The interesting thing about the survey is that buyers essentially confirmed the view of the owners who plan to sell. Buyers are a little less confident now that they be able to snatch up a business for a bargain basement price. Well, that’s overstating it a little. In the survey they phrased it as being able to purchase a business at “a good price.”

Sales are strong

Other good news for buyers is that sales remain brisk, in relative terms. When BizBuySell took the market’s pulse last quarter it found the strongest market for business sales since the recession and that pace continues.

Looking to next year, however, the consensus seems to erode a little. A sizable percentage – 29 percent of buyers and 36 percent of sellers – think they will get a better deal if they wait another year. One of those groups has to be wrong, unless the market is unchanged in 2015.

As you review these figures, think about your own exit strategy. If it involves selling your business, the lesson here is that you shouldn’t depend on selling at a specific time. Consider a window in time in which you would comfortable with selling and if prices hit a target that’s acceptable, strongly consider pulling the trigger. You don’t want to face a market of falling prices just as your “window” is about ready to close.

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Image: “American Cash” by Revised by Reworked – Own work. Licensed under Public domain via Wikimedia Commons.