05 Nov Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from Inc. entitled “Selling a Business During a Pandemic: What Baby Boomers Can Learn From Business Brokers” discusses what business brokers are saying about the current market and what it means for selling a business.
Insights from business brokers include:
- Essential businesses are in high demand, making it a good time to sell if you own one.
- Struggling businesses should look for ways to pivot to increase sales.
- Closed businesses might consider an asset sale as opposed to hanging on or walking away with nothing.
- The economic consequences of the pandemic show that you never know when you might need to sell your business, so always be prepared with good financials and a sellable business.
- If you’re considering delaying the sale of your business, consider the personal consequences and the business consequences.
- The fundamentals of business value remain the same.
- The current economic challenges will eventually pass.
A recent article and video from Divestopedia entitled “Exit Options for Business Owners Who Are Thinking of Selling” explores primary exit options and how to know which might be realistic for you and your business.
Potential buyers include a strategic buyer (third party such as a large corporation or a local competitor) or a private equity group (large global group, local investor group, wealthy individuals). You could also go public with an IPO, but this option is not realistic for most middle market businesses.
When evaluating which type of buyer makes the most sense for your business, consider the size of your business, the scalability and potential growth of your business, and what you envision as your post-sale role.
A recent blog post from Viking Mergers & Acquisitions entitled “7 Steps to Selling a Business” details the key steps involved in selling a business.
These steps include:
- Valuation – determining how much the business is worth
- Marketing – marketing the business for sale to potential buyers
- Buyer/Seller Meeting – initial meeting to get to know each other, discuss the business, answer questions
- Offer for Purchase – buyer makes a formal offer to buy the business
- Negotiation – offer is negotiated, accepted, or rejected
- Due Diligence – after offer is accepted the buyer reviews all information given to them about the business for accuracy
- Closing – after due diligence is complete and financing is ready, closing documents are drafted and the sale is completed