15 Jan Around the Web: A Week in Summary
A recent blog post from AZ Big Media entitled “How to identify when the time is right to sell your business” provides a brief overview of the actions and considerations a business owner needs to take in order to get the full benefits of selling their business.
There are many factors to consider when selling a business. Some of these include:
Analyze your company’s historical revenue patterns – Noticing a meaningful pattern in your business’ growth and decline over the years can be beneficial in deciding when to sell your business. You might find that revenue follows a specific pattern each year, or over a number of years. Once you identify the patterns of when your business is thriving or preforming more modestly you can identify an ideal time to plan the sale.
How the industry is performing – Monitoring the market can be a great way to recognize a favorable time to sell your company. Keeping an eye on the market can help you stay ahead of competition and stay up to date with trends. Noticing competition popping up in your field can be beneficial to concluding if there is growth in demand for your company’s specific products and services. Taking note of these trends could help signal an opportune time to start looking for potential acquirers.
Timing for financial performance – Completing a sale before a company’s year-end can reduce the likelihood of a deal being called off. The idea here is for the deal to close before full-year performance data is available in case of a revenue or profit miss for the year. Keep in mind, it takes an average of one to two quarters for a company to solicit and review offers, work through diligence, etc.
A recent blog post from Sunbelt entitled “Starting a Business vs. Buying a Franchise: Becoming an Entrepreneur in 2020” provides detail into the decision making process of either starting a business from the ground up or buying an existing franchise, and provides tips to helping make that decision easier, especially for first time buyers.
Both starting your own business and buying a franchise require hard work and immense dedication, but starting your own business can require extra effort. You may need to dive into many additional steps to get a business started, such as establishing a business model and generating brand awareness. For those who like total control, this may be more appealing.
When it comes to franchises, they already have systems in place to help navigate through the challenging aspects of owning a business such as a business plan, ongoing support and brand recognition.
A recent article from Forbes entitled “Why 90% Of Potential Business Buyers Fail” provides an explanation as to why prospective buyers often fall short of reaching their goal and understanding the statistics of why deals fail. According to industry statistics, only 1 in 15 prospective small business buyers ever complete a transaction.
Common reasons buyers never purchase a business include:
- High percentage of non-quality businesses for sale
- Buyer not knowing what type of business is right for them
- Financing challenges
- Holding out for the “perfect” business
- Unwillingness to pay a premium for a good business