11 Aug 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 Viking Mergers & Acquisitions entitled “Three Reasons Why 2021 is a Great Year to Sell Your Business” discusses why this might be the right time for you to exit your company. Timing is critical when it comes to selling a business, and external factors play a big role in this timing.
One reason why this is a good time to sell is that capital gains tax rates haven’t increased yet. There is a good possibility that there will be an increase as soon as next year, which could decrease the amount of money you get to keep when you sell. So selling before the tax rates go up would be wise.
Another reason why it’s a good time to sell is the high level of buyer activity. There are a lot of buyers looking for resilient businesses and quality acquisition candidates.
These buyers are also motivated by favorable lending conditions. The SBA has reduced fees, increased Express Loan amounts, and increased loan guarantees.
A recent article from Sunbelt Business Brokers entitled “How to Find a Buyer for My Business” outlines several ways to find interested buyers when selling your business. There are many types of buyers, such as strategic buyers and financial buyers, and there are many tactics to find them.
5 methods to find buyers include:
- Hiring a business broker
- Listing the business on business-for-sale websites
- Working with a private equity firm
- Selling to a partner or employee
- Selling to an engaged family member
A recent article from Exit Strategies Group entitled “How three private equity firms valued the same company” recaps a recent exercise where three private equity firms reviewed and submitted offers for a hypothetical company. This exercise offered insights into the market, trends, value drivers and detractors.
Key takeaways from the exercise included:
- Buyers have money that they would like to put to work
- A strong management team is very important
- It is advantageous to exit when the business is trending up
- Buyers prefer that there is not too much concentration in any one customer or vendor
- When private equity firms invest, they intend to sell within a certain timeframe and will often collaborate with management to identify when the time is right