January 5, 2015

Questions to consider before selling: Is the market ready?

Over the past few weeks, we have been talking about some of the key questions that you need to ask yourself before selling your company. There are a number of factors at play when it comes to making a financially savvy choice. 

In our most recent post on this topic, we discussed the importance of examining the financial state of your company. While many businesspeople think about selling their company when it seems to be in a slump, the truth is that the best time to sell is at the peak of success.

But what about the market? Ask yourself what industry indicators need to be in place to make a fiscally responsible decision.

According to Lisa Girard of Entrepreneur, "Before selling, look at current market conditions for your industry. Selling a home improvement business in 2006 showed a pretty good return. Fast forward a couple of years and many roofing, siding, home financing and other housing-related companies had lost a big chunk of their value."

Evidence of this was in the mid-2000s when many companies were doing well enough to garner offers from various buyers. Many of these turned down offers because there was no indication that the economy was set to fall. A few years later, they weren't able to get a fraction of the previously offered prices. 

Owning and operating a business is a lot of work. It requires an understanding of the needs of your clients and your investors. It is also crucial that you understand the possibilities and limitations of your services. If you are considering your options for company mergers, it may be wise to consult with a professional merger advisor. To learn more about how we can help, contact us today!