Dear Entreprenuer,
It is time for a view through the looking glass of business sales. In 2014 both volume and the average price of a business sale saw double digit growth (40% and 11% respectively). Certainly this is good news but, as the first quarter rolls around we see some soft date that is not catching headlines that should be taken into account by buyers and sellers alike:
• Inventory remains flat and in some verticals tighter than ever: In 2006 and 2007 arguably the highest volume of business ever listed and the tip before the recession began there were roughly over 1000 businesses for sale in the 5 County Area of Orlando. Today there remain less than 500.
• Seller Tsunami….when will it hit: Another flash back phenomenon is the never ending question of when will the baby boomer generation begin to sell off their assets or transition. Unfortunately in small and mid-capital market businesses there is not a tracking mechanism to gage age all we as brokers can do is assess what we are seeing. The consensus from what we are witnessing is that the boomers (60+ for this argument) are assessing the exit but holding for sale. This is supported by the tight inventory of businesses. That being said one must wonder about that generation and when the floor or Tsunami as some are calling it will tip and wash the market….subsequently impacting prices which will inevitably dip with the pressure of availability of choices to buyers.
• The Question: In our practice never before have we seen sellers worry about the next bubble. Entrepreneurs are positive thinkers. In almost every seller interview a question is posed about the next recession: Are we positioned to weather it? When will it be? Do I want to go through it again?
These questions and others are just some of the variables to be considered when looking at exiting your business. Part of the team you should be working with are business brokers and intermediaries skilled in preparing and getting your business sold. As a Board Certified Intermediary I have the requisite skill and training to position your business for sale for the maximum profit to you and your family. Feel free to learn more at www.businesses4saleorlando.com www.tworld.com/michaelshea or call me at 321-287-0349.