24 Jul Around the Web: A Week in Summary
A recent article from BizBuySell entitled “Q2 Small Business Transactions Down as Trade War Questions Remain” provides a summary of the reported transactions from the second quarter of 2019, the current market conditions and what to expect going forward.
According to the BizBuySell.com Second Quarter 2019 Insight Report, a 9.6% dip in the number of transactions occurred in quarter two when compared to the same quarter of last year. The reported drop in business sales are speculated to be related to the current political climate. Experts advise that the drops are not a reason to be concerned about the health of the market and that growing financials and record sale prices are signs of a strong market.
The report further discusses potential concerns and upsides for both buyers and sellers, who are advised to take precautions regarding the changes in tariffs. On the flip side, it is encouraging to see a significant number of high value, scalable and stable businesses that are available due to a strong, healthy economy.
A recent article from Allen Taylor Mergers & Acquisitions entitled “3 Reasons You’re Not Building A Sale-Ready Business” explores the major reasons why business brokers see sellers refrain from creating an exit plan, and the problems that each reason can create.
For many business owners, the humdrum of everyday operations and road bumps occupy the majority of their thoughts and time. This often leaves their exit from the business to be the type of issue that is ignored until it becomes a pressing one. Here are three major reasons owners aren’t building a sale ready business and why they should be anyways:
- They think they will never sell their business – Whether this means that they’re intending to pass the business to a successor or they simply never plan to leave their business, this thought process leaves out one important factor: life happens. Planning for a potential exit, even if it isn’t your plan A, sets you up for success even if your successor doesn’t work out or you become unable to run the business due to health or personal reasons.
- They’ll prepare their business for sale ‘later’ – Ideally, a business owner will spend at least 2 years preparing their business for sale if they wish to see the best results. Procrastinating can mean that important value is lost when the owner decides that they are ready to sell, or that their intended timeline ends up being pushed back in order to facilitate any necessary changes to make the business sellable.
- They aren’t sure how to start building a sellable business – If this is the case, there are plenty of available resources including advisors who can help owners navigate this process. A simple, minimal effort place to start is to get a business valuation.