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It is time to sell your business?

Posted by Paul Visokey

Thu, Aug 11, 2011 @11:25 AM

What will save our economy? Deals!

It is time for buyers to get off the sidelines, it is time for sellers to reconsider their exit!  At a time when “cash is King” it is time for deals to happen again!

With economic uncertainty -  anyone can appreciate a buyer’s hesitancy in doing a deal or understand a seller’s trepidation in selling their company when they think its value is depressed.

Truth is, pricing multiples are about the same as 2007 – there is more cash on the sidelines than ever before. There are good deals out there to be had. It is just time for all of us to step off the ledge and invest. It is time to buy and sell businesses again. Buying a company with solid historical cash flow and growth potential will always be a good investment – certainly better than the 1% return cash is getting today or the roller coaster ride the stock market has provided. Taking your hard earned equity out of a company and reinvesting is also a solid move when the time is right…

So – let’s start doing deals. Are any bankers reading this? How about stepping up and lending again! Put some money into our economy! Stand behind a deal and take a calculated risk on a loan that is not fully secured with collateral. Do SBA loans – provide lines of credit! Is there anyone who wants to say yes and make some real money by providing capital to good businesses?

Let’s look at the effect of a deal on our local economy: Joe buys Amy’s business. Doug is the Broker. Joe takes some of his savings and applies it to the down payment and a Bank funds the remainder of the deal with an SBA Loan and a small seller note. Joe works hard and grows the business – adds 4 new positions to his firm creating jobs locally. His vendors grow and add jobs. Amy is ready for a new challenge. Before investing in a new business, she buys a new car to replace the company vehicle she was driving and takes her family on a much deserved vacation. The salesman at the car dealer makes his bonus and takes his family to the beach for a long weekend. While vacationing they spend money at restaurants, etc.– helping grow those businesses…meanwhile the salespeople who sell to Joe are so busy they hit their bonuses. One of them buys a home theater – that salesman makes a bonus and so on down the line. The Broker, Doug, earns a commission – the firm spends more money marketing and grows by adding positions. Doug uses some of his new cash and has work done on his home, creating work for a contractor…and so on and so on and so on…

All because a deal closed. Joe worked hard as he always has – but this time for himself. Amy cashed out and invested some funds towards retirement and kid’s college….a bank loaned the money and got fees / interest – creating cash flow to lend more.

So let’s get off the sidelines and start doing more deals – everyone will win.

 

Written by Kevin Freeman, Managing Partner

Topics: Selling your business, business planning, selling business action plan, business valuations

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FAQ's >

Do you own your own business?

The US economy is driven by entrepreneurs - small and mid-market businesses, more than 20 million of them, many of them privately-owned. It is often difficult for owners to convert all of their hard work and ingenuity into an equity event. It is a complex and time-consuming process. Stony Hill Business Brokers has the experience and expertise to assist with selling a private business successfully.

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Is it time for a change?

All of the partners at Stony Hill Business Brokers have been entrepreneurs in private businesses and have had experience managing and selling their businesses. We understand the grind of running your own show and the uncertainty of getting the most value for the business.

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Are you looking for guidance?

We have particular experience with the small business market in eastern Pennsylvania, New Jersey and Delaware. We can provide advice on preparing a business for sale, even years in advance. We can help buyers find the right business for their circumstances. And we advise both sellers and buyers throughout the process to assure a quick, smooth transfer of ownership.
Do you own your own business?

The US economy is driven by entrepreneurs - small and mid-market businesses, more than 20 million of them, many of them privately owned. It is often difficult for owners to convert all their hard work and ingenuity into an equity event. It is a complex and time-consuming process. We understand the grind of running your own show and the uncertainty of getting the most value for the business. Stony Hill Advisors has the experience and expertise to assist with selling a private business successfully.
Are you looking for guidance?

We have experience in the small and mid-market business market with companies having revenues from $1M to $50M . We can provide advice on preparing a business for sale, even years in advance. We can help buyers find the right business for their circumstances. And we advise both sellers and buyers throughout the process to assure a quick, smooth transfer of ownership. In some instances, the parties to a transaction locate each other through informal industry or personal channels. These transactions include sales to unrelated third party acquirers, as well as management, family and partner buyouts. Stony Hill Advisors is frequently engaged to structure these transactions and navigate the many issues requiring attention from the initial stages to the consummation of the transaction. Often Stony Hill Advisors is engaged to provide Exit Value Planning to prepare a business for highest value when it is time to transition.

 
Are you interested in buying a business?

Stony Hill Advisors assists companies, entrepreneurs and corporate executives develop and execute customized acquisition strategies designed to result in successful acquisitions. We will find a unique business that is not necessarily “on the market”, resulting in a cost-effective acquisition.

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