Should you Sell your Business Now?

Should you Sell your Business Now?

5 Reasons why 2021 might be the time you look to sell your business

Have you been thinking about selling your business but just cannot decide if now is the best time after the carnage of 2020?  Do you find yourself repeatedly analyzing the economic and health situation and looking for clues as to which way to turn?

If you cannot quite decide whether or not to exit, here are five reasons you might want to consider getting out now.

1. You’re less interested in fighting the good fight

A lot of business owners in just the last 10 years, got slammed by the Great Recession, the oil collapse, and now the Covid outbreak. Despite these challenges, if you have been able to stabilize your business and the prospect of possibly having to deal with another market shock or recession makes you figuratively ill, it could be time for you to get out.

2. The worst may be behind you

Chart showing different recession GDP falls. 

https://blogs.worldbank.org/opendata/understanding-depth-2020-global-recession-5-charts

Let’s say you were mentally ready to consider selling a few years ago and then 2011,2015 and 2020 hit forcing you to make cuts and adjustments. With a leaner business model, you might now be starting to once again expect some profit and revenue growth in the next couple of years.  With your numbers going in the right direction, now might be just the right time to make your move to sell your business.

3. Potential Increase in Fees

As oil prices remain depressed GCC governments have turned to VAT and other revenue increasing tools. After COVID’s decimation when governments were forced to reduce fees and spend on stimulus, the temptation to increase fees cannot be fully discounted as the economy stabilises and recovers.  The current attractive environment of low fees might be an ideal time to exit..

4. Nobody is Lucky Forever

If you’re lucky enough to be in a business that actually benefits from a bad economy, congratulations… you’ve probably just had the five best years of your business life. But no cycle lasts forever and right now might be a great time to take some chips off the table.

5. Increasing Number of Businesses Looking to Sell

As a result of COVID, the number of business owners looking to sell in the next five years has increased by 17%. As a business owner, supply and demand for business sales are not on your side.  There may be a glut of small businesses coming on the market. That’s great if you’re buying; but if you’re a seller, you may want to avoid the flood and head for higher ground now

These are five reasons you might look to sell. However, do not even consider starting the process without analsying your business valuation and where you stand on the 8 key drivers of business value that any potential acquirer would measure.

The Sophiall Solution incorporates The Value Builder SystemTM, a proven statistical system that utilises a 13 minute questionnaire to allow business owners to assess the “sellability” of their company.  Those that score higher then 80 tend to receive offers 71% greater as a percentage of pre-tax profit then the average company. The system has analysed the data from nearly 60,000 companies in a variety of countries to understand trends in the business market, with a special focus on the liquidity of privately held businesses.