Selling A Business During Economic Uncertainty

Business owners are familiar with the up and down roller coaster of change that comes with business ownership. As the world changes around them, they’ve learned that the most important things to focus on are what they can control. The rest – all of what they can’t control simply becomes the ever-changing landscape that drives their decision making. Uncertainty becomes their constant companion: interest rates, competitors, cost-of-goods, regulations, tax laws, and markets are simply the dynamics to consider as they make decisions for their business.

Most survive through change because they are committed to the success of their business – they’re in it for the long haul. They have confidence in themselves and their business and feel that whatever comes at them they can either use to their advantage or hunker down and weather through. They have a long-term view of business ownership. This sense of confidence shifts to concern when a business owner is ready to realize value from the sale of their business and there is economic uncertainty.

It takes months and sometime a year or more to sell a business and it’s a fact that businesses face uncertain conditions today. There are cybersecurity risks, geopolitical instability, inflation concerns, and the unpredictability of interest rates and future tax laws. The best way for business owners to prepare themselves to sell in uncertain times is to focus on what they can control.

Three Ways Business Owners Can Prepare to Sell in an Uncertain Economy:

1. Know the Market Value of Your Business: If you’re relying on your business to help fund your retirement or to start a new business venture you’ll want to know if there is a gap between its current market value and the amount of money you’ll need or want. Knowing your market value today can help you prepare yourself and your business to be in the best position when you do decide to sell.

2. Learn how Buyers Think: There are a myriad of decisions to be made throughout the sales process and the more prepared you are to make them, the more likely you are to land at the closing table with a check in hand. Being prepared begins with taking an unbiased look at your business – to put on the Buyer’s Glasses and learn what drives value from their point-of-view.

3. Ratchet up your ability to be adaptable and flexible: Remain calm and carry on is a good Sellers mantra. Adopt the belief that regardless of what comes along you can adapt to it if you also remain flexible. There are many ways to structure a sale and in uncertain times flexible deal structures can help you get your business sold. Work with your deal team to discuss earnouts, carry-backs and both traditional and non-traditional funding and deal structures. Keep your eye on the goal of selling but remain open to how that sale can be achieved.

To learn more about selling during an uncertain economic period, preparing your business for sale, or what to expect during the sales process, contact us for a confidential conversation.