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Exiting Your Business

Exiting Your Business

We all know there is a threat of a recession, whether it has already begun or will begin later this year. Recessions can be lengthy and can cause a slow recovery for the economy. If you are looking to exit your business, the economic uncertainty can pack on the pressure to sell your business now verse waiting several years for the economic upturn. Whether you are worried about your business being harmed financially or want to capitalize on your current profitability, the question of when to move forward with selling your business can be at the forefront of your mind. 

With the vast majority of Baby Boomers set to retire by 2030, there are more and more sellers whose need to sell is not slowing down during the economic uncertainty. In fact, the need to sell could be increasingly causing more sellers to inquire about the best time to sell their business.

Should I sell my business? 

If you are looking to sell, inflation is going to impact your business valuations. The housing market provides a great example of this. Interest rates have increased causing monthly payments to rise. With your baseline payment increasing, your current budget may not be realistic anymore. Therefore, you might have to wait or cut something in your budget.

This can be applied to your business as well. Is it worth it to sell now or should I wait?

If the buyer of your business borrows money to buy your business, they will need to repay the loan from your cash flow. If your business profits are impacted by the recession, they may not be able to cover the loans. The net result is they will pay less for the business to lower the amount they will borrow.

Next Steps

Your business may be your most valuable personal asset, as many owners grow their companies over decades. The prospect of selling your business can feel overwhelming, as you want to receive a fair price for the assets you’ve worked so hard to create.

A business sale also requires extensive preparation, and you should take action to prepare for a potential sale now. 

You might be thinking but I am not ready to sell my business right now. 

But eventually, we ALL must sell our business at some point in our lives or close it.

There are several reasons business owners decide to sell their companies — you’re moving to another city or state, want to capitalize on a certain selling price, you're looking for a new challenge or it’s time to retire.

Whatever the reason, once you decide to sell, you can’t just hang up a “for sale” sign and wait for the offers to come rolling in. Selling for the right price takes time and preparation. It is especially important to prepare the business by reducing risk factors for the next owner.

Even in today's economy, there is no better time to start preparing. 

7 Questions to Ask Before You Buy a Business
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