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THIS MAY BE THE RIGHT TIME
TO SELL YOUR BUSINESS
During the past few years, the economy has wreaked havoc
in the business world. Businesses both small and large
have taken a beating, and only the strongest are
surviving. Given this outlook, many business owners are
wishing that they had sold their companies back in the
bountiful days of the mid-to-late 1990’s.
Market
forces and changes in consumer spending patterns cause
cash flow issues which may lead many business owners to
the decision to call it quits and liquidate their
assets. While this is certainly an option, albeit an
extreme one, owners should consider the fact that, even
in a depressed economy, their businesses may hold value
for some prospective buyers.
·
There are always entrepreneurs looking for deals. It
may be cheaper for them to acquire an existing business
and build it up, than to start one from scratch.
Prospective buyers include venturists, competitors,
leverage buyers, etc.
·
The buyer may already own a similar business, and by
combining the two, increase revenues while maintaining
or lowering operating costs.
·
Certain aspects of a business may hold special appeal,
such as customer bases, proprietary technology,
intellectual property such as trademarks, domain names,
and patents, strategic locations, or key personnel.
·
A prospective buyer may have a different business model
in mind for a company, or have different financial
expectations. The buyer may have ideas about
reorganizing or repositioning that could make your
business more profitable.
·
The acquisition of a struggling business may serve as a
loss, and operate to offset the buyer’s profits.
Keep in mind that in a tough economy, the value a
prospective buyer is willing to place on a business may
not necessarily coincide with value, both financial and
emotional, that you, the owner, places on it. For this
reason, you should be careful not to get defensive and
confuse your business struggles with personal
shortcomings. You should allow and encourage potential
buyers to focus on the upside, such as their ideas for
reorganization, repositioning, and untapped revenue
potential. You should also consider terms of indemnity,
liability, and employment, in addition to the cash being
offered, as part of his compensation for selling the
business.
As in all aspects of business, having the expert advice
of a trusted advisor is a way of ensuring that all
options have been considered, and the best one chosen.
The advisor can guide you through the selling process,
help you evaluate the worth of your business and its
assets, and may be able to help match you up with
potential buyers. If you think clearly, keep a cool
head, set reasonable expectations, and seek the counsel
of trusted experts in the area of business acquisition,
you can realize a healthy return by selling his
business, even in a tough economy.
We can help! Contact us for a free consultation.
Jay L.
Fialkow
© 2003
RossFialkow Capital Partners, LLC
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