12 Sep Half Of Business Sellers Regret Timing But Business-Sales Market Rebounds
One in two business sellers have confessed that they wish they’d advertised their business for sale sooner, a BusinessesForSale.com survey has revealed.
Fewer than one in five (18%) of the hundreds of sellers polled were, by contrast, certain that their timing was right, leaving roughly one in three (32%) unsure about whether they had timed the sale of their business wisely.
That so many sellers are beset by such self-doubt should come as little surprise given the stakes. The culmination of years of dedication, hard work and personal risk, a well-timed sale can fund a comfortable retirement or the owner’s next venture.
All too often, however, business owners are reluctant to sell up when their business is thriving. It’s like leaving a New Year’s Eve party before the clock strikes 12.
And entrepreneurs, optimistic folk by nature, will often believe that they can build an even more valuable business before they decide to exit.
But many will seek an exit only when fortunes nosedive – along with the business’s valuation.
Choosing to sell because you believe the business is at its peak – a motivation behind only 2% of sales – is difficult because you’re essentially predicting the future.
Judging that your asset is as valuable as it’s ever going to be can be perceived as a poor reflection on your capacity to grow businesses, even if new competition, changing technology or shifting consumer tastes make decline inevitable.
It’s a fiendish dilemma, one complicated by personal factors such as a desire to retire or move onto other ventures.
The survey also revealed that 39% of business sellers admit that they didn’t spend enough time preparing their business for sale.
Asked about how much they cared about the business’s fortunes after the sale had gone through, about one in three (32%) said it was important to find a buyer capable of running the business successfully as it would upset them to see the business fail.
Conversely, one in four (25%) said that as soon as the legal process concluded it ceased to be any of their concern. The biggest proportion, at 43%, said they had mixed feelings about the business’s prospects once ownership had changed hands, admitting that they hoped the business would continue to thrive, but that securing the highest asking price possible was of paramount importance.
Meanwhile, the business brokers who help sellers find buyers and sell their business identified manufacturing, energy and senior care as growth sectors attracting a particularly large volume of buyers at present.
Also cited as sectors to watch in 2013 were discount/consignment retail, non-discretionary retail and services, and maintenance and repair businesses, as consumers increasingly priorities value or opt to repair rather than replace their possessions.
Asked which sectors were currently struggling to find buyers, brokers cited Medicare-dependent or other government-dependant [businesses], hair salons, travel and other expensive forms of entertainment, ‘Made to order’ dining establishments and retailers, which are increasingly threatened by big-box competitors an online competitors.
Brokers were also asked about the state of the marketplace in the final two quarters of 2012, with many reporting an upturn in buyer activity. “Activity is slowly bouncing back,” said Joe Goldberg of Sunbelt Business Brokers in Tarzana, California. “We’ve had more activity in the last six months than the previous six.”
Another professional intermediary concurred, reporting “more activity in the marketplace this year compared to the post-crash period.”
Positivity about the business-sales market was far from universal, however. One broker with four decades of experience selling businesses was dismissive of “the so-called rebound in the USA”, labelling it a “joke, media hype,” adding: “Business owners are in real trouble.”
By Adam Bannister, Managing Editor of BusinessesForSale.com, a global leader in buying and selling businesses online. Our primary aim is connecting entrepreneurs, business intermediaries and marketplaces within the B2B and B2C arenas.