05 May Around the Web: A Week in Summary
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A recent article from Inc. entitled “Should You Sell Your Business in 2021?” explores a key question that many business owners may be thinking: Is it time to sell? The past year has been spent just trying to stay in business for many. Now that vaccinations are increasing, restrictions are decreasing, and the economy is recovering, some owners may be contemplating a sale.
A few things to consider when exploring a sale in 2021 include:
- Buyer demand is strong
- Buyers are looking for businesses that have weathered the storm over the past year
- The volume of businesses for sale is expected to grow which could mean increased competition
A recent article from Viking Mergers & Acquisitions entitled “Can I Sell My Business If I Have an SBA Loan?” discusses options for business owners who wish to sell but whose business has an SBA loan. The good news is this is doable, as long as the lender is on board.
Once the lender approves, there are three possible scenarios:
- If the business is worth more than you owe, you can sell it and use the sale proceeds to pay off the loan.
- If the business is worth less than you owe, you can sell it, put all sale proceeds towards the loan, and take care of the remaining loan balance with personal funds or perhaps through a settlement.
- The buyer could assume the loan if they meet all lender requirements.
A recent article from Exit Strategies Group entitled “7 Keys to Making Your Business Sellable” offers advice for business owners considering an eventual sale. Long before it’s time to sell, an owner should begin to work on making the business more valuable, more appealing and easier to transition.
Some ways that business owners can improve their business before selling include:
- Scaling to EBITDA of at least $1 million to increase the buyer pool
- Increasing profitability to exceed a working owner’s compensation needs
- Setting the business up to operate without the owner
- Developing a customer acquisition system
- Focusing on your winning products and services
- Creating consistent year-to-year growth
- Placing a large focus on profitability and cash flow