From time to time, we all look back on different periods in our life, and wonder how things might have turned out differently, had we taken a different path or made a different choice along the way.
It seems now, that there are many more business owners considering selling their business. So why now? Why is there an upsurge in activity, when it comes to deciding to sell their business?
Many business owners, having been financially decimated in the last recession, have been keeping a close eye of the economic situation. It’s been hotly forecast for a few years now, that the next recession will be bigger than we’ve ever experienced, mainly made worse by all of the quantitative easing by the governments of the World. This turning some markets into a bubble.
So here’s a few reasons why a business might consider selling:
1. Reduced interest in fighting
With the effects of BREXIT looming over the next few years, along with what seems like daily progression toward World War 3, if you fought to survive during the last financial crisis, you probably don’t want to go through that experience again. Anything could trigger the next crash, and with the stock markets at record high levels, people have been predicting the ‘great crash’ since 2014.
2. Consistent Positivity
If you scraped through the effects of the last recession, you managed to survive, and turn your business around, and you’ve experienced consistent increases in sales and profitability for the business, then perhaps now is the right time to get out
3. The Communist Movement
With an increased aging population, healthcare, education, housing, food, & transport all face shortages in funding and supply, regardless of your location in the world. The money has to come from somewhere, and the likelihood is, the governments of the world will take it from business owners, through an increase in taxes. We see signs of this almost weekly, as governments bring in increased regulation for small businesses. The tax incentives available now, probably won’t be around for much longer.
4. The Cycle is Reaching Its End
For some industries, the last few years have been the best they’ve ever experienced. But eventually cycles come to an end. Could you be one of the lucky ones, those who timed the market perfectly & got out while you were at the peak in the cycle.
5. A Buoyant M&A Market
The Mergers & Acquisitions sector has been booming since around 2014. Large companies saved a war chest of cash reserves through the recession years. In 2014 they started to spend it. All of this was fueled by the low interest rates. As with every cycle though, these things start to slow down.
6. The Retirement Flood
If you’ve been considering selling your business, time may not be on your side. Over the next 5-15 years, more than 70% of business owners will reach retirement age. In the UK alone, this means that we’ll see an average increase of more than 20,000 businesses that wish to sell EVERY SINGLE MONTH! To put this into perspective, in the last 5 years, there’s only been an average of 20,000 businesses listed for sale throughout the year.
The increase in supply of businesses to the market, means the value of your business will plummet. Unless your business stands out, particularly by size, it will most likely be overlooked anyway. Getting out before the flood comes, could be the difference between clinging to that life raft, versus relaxing on the beach sipping margaritas.
We hope you’ve received some value from this article, and some information that you can use to move forward toward your vision.
If you’re confident that selling your business is the way to go, or perhaps you’re undecided, it’s important to consider the significant amount of effort and resource you’ll need to make it happen. It’s a full time job. - The time investment alone is enough to put anyone off. So imagine for just a minute, that you didn’t need to do all of this work. What if this could be done over the next 3 - 5 years (by someone else). Everything we’ve listed in this article, is what you’d need to do, if you were selling through a business broker, or direct to a buyer.
Unlike other private equity firms, our focus is on growing businesses at the smaller end of the market. We’ve worked in, and grown our own businesses in the exact same fields you work today. We’ve spent years coaching and supporting small businesses just like yours, developing their teams, and helping them to grow, but now, we’d like to help you.
We have a solution for business owners that need to sell their business immediately, or for those who want to stick around for a few years.
If you’re considering the options to grow or sell over the next five years, read more about how we're helping others just like you. Click here to read about our unique approach to helping you get what you want with the YokeFormula™ for your business.
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