Buying or Selling A Business – Is Now the Right Time?

There is a lot of uncertainty in the marketplace now with everything happening in the world. Uncertainty can create opportunities for business owners. Some business owners want to retire and think that it is a great time to sell, move to a warmer climate, and play more golf. Other business owners will look at this time as an opportunity to grow and solve issues. They may look to grow by increasing their book of business, finding an additional location, or acquiring onshore production to start making the parts that go into their products. It is not that these owners don’t want to sell their businesses eventually. Instead, it is more about them wanting to grow their business enough to be valued at what they would like it to be worth when they sell. Then when they do sell, some may decide to buy another type of business in a warmer climate!

How does a business owner know what is right for them? Sometimes, the marketplace will give them guidance. A lot of business owners think that they know what their company is worth, or know what potential buyers are looking for, without getting any information from other people who are out in the marketplace, such as business brokers, and private equity or investment bankers. Business owners may think that what buyers are looking for is static – a particular gross income marker, the historical business methodologies or numbers, or the location. Instead, often buyers are looking ahead to see what new products are on the horizon, whether the systems and processes are in order, whether the team is on board with the vision, whether the company has longer term contracts, and what future revenues are going to look like.

Knowing information of this nature will give the owner an inkling of whether this is the time to sell, or what needs to happen over the next few years to easily sell and get top dollar. It may be counterintuitive, but the owner may need to buy a business that will either provide additional bandwidth. or expand either vertically or horizontally. Every industry is a little different in what buyers may be desiring. Sometimes, the best way to get a reading is to periodically contact business brokers that are involved in the sales of similar businesses in the industry. The same is true of working with private equity groups that cater to that industry. This may also involve hiring a valuation expert, who can tell owners what other businesses have sold for, and what the higher value businesses did to get a better price. Of course, the owner cannot ignore the overall outlook for the industry that they are in as well. It is all about having the right information.

Another important factor to consider is whether they are still having fun running and growing their business(es). Sometimes, this is the most important consideration a business owner has, as they spend so much of their time and effort in the business. If they have lost the joy that comes from it, then it may be time to move on. Whatever the reason is for considering selling, owners should keep in mind there is a multi-year process to consider if they want things done right so they get a higher sales price.

Business owners who are not ready to retire and want to seize the opportunities in today’s market to grow by building their businesses up stronger and making them more resilient will find many opportunities to do so. Seeking advice from professionals who can help you strategize, avoid legal troubles, and make sure you have thought things through from all angles, will allow you to seize the moment.

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Denice Gierach

Gierach Law Firm

Denice Gierach is an attorney, CPA, Northwestern University business master's graduate, and has owned several businesses from real estate to manufacturing. She is the lead attorney at Gierach Law Firm in the Chicago area. With more than 30 years of experience, she has been a respected and sought-after resource for businesses looking to grow, sell, solve problems, and succeed long term. Her insights across business areas gives a fuller lens to business issues and solutions, and helps businesses grow and succeed with less time spent on legal issues and other time-consuming problems.

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