Knowing when it’s time to sell your technology business
How do you know when the time is right to sell your technology company?
There are many different factors that must be considered, but several reports show that overall, the M&A market is improving. Entrepreneurs who want to either expand their business or move onto a new project could have numerous opportunities before them. The important thing is to know what to look for and surround yourself with a quality M&A team.
Josh Sevick, a managing director at a business brokerage firm, explained that during the recession, businesses weren't making a lot of money. The result was that it was more difficult to prove profitability when it came time to sell a company. However, circumstances are beginning to turn around.
"This industry got decimated through the recession and from 2008 to 2012, but in 2013 it's picked up significantly," he told Fox Business News.
Fox cited data from the website BizBuySell, which found that confidence is growing on both ends of the M&A spectrum. Specifically, 80 percent of prospective buyers feel confident they would get an acceptable price in the current market, and 65 percent of those looking to sell think they could find a price that meets their expectations.
According to a recent Entrepreneur Magazine article, business owners who want help in the mergers and acquisitions process should find quality investment banking firms. The news source explained that company leaders and their employees need to have an understanding of key business sale concepts like valuation and discounted cash flow.
Additionally, it is important to know how your particular industry and market are evolving. That way, it will be easier to determine how your company fits into the changing picture and what type of opportunities could be found. Working with the right team — accountants, lawyers, investment bankers — will all help simplify that process.