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Should A Business Be Sold After Its Most Profitable Year?
What goes up eventually goes down, even if just momentarily. In the stock market, the saying goes “buy low, sell high”. This could likewise apply to business selling but in a more concrete way.
Unless you’re planning to keep your Long Island venture for the long term, you may want to sell your business whenever you’re able to get the highest business valuation. Long Island business brokers would point to your most profitable year as possibly _THE__BEST _moment to sell.
WHAT ATTRACTS BUYERS TO A BUSINESS?
It’s very important to understand the psychology of a potential buyer. Most investors aim to have money work for them and not vice versa. They would most likely opt for a company that has an already established brand with a loyal customer base and a stable recurring income. The mere idea of having to start a marketing plan from scratch or organize entire departments will probably scare most of them off from the start.
A thriving business, a leader in its respective industry with a renowned and verifiable trajectory, will undoubtedly turn more heads than an underdog that can hardly make a sale or that is past its prime. which is, ironically, the stage in which most business owners would look to sell because of disenchantment and other emotional factors.
It should also be stressed that investors would want a business that has the potential to keep flourishing and growing, and not just one that is “doing well” at the present moment. For this reason, growth projections must be done in the most accurate manner. Moreover, the owner should not completely detach him/herself from the company’s operations during the sale process and, in many instances, investors would want the former owner to stick around even sometime _after _the deal is done.
All of these profits and projections would come at a price, of course, which is ascertained through a meticulous business valuation. Long Island brokers would make sure that all of these factors are included and reflected in the final analysis.
To avoid any discrepancy in this regard and to ensure a buyer’s trust, the “due diligence”, which is the review performed by the prospective buyer to make an informed decision, would have to take into account nearly the same information that is usually provided for business valuations.
Long Island has a very competitive business selling market that is, admittedly, a tough nut to crack, which is why finding the best opportunity to sell your business can get complicated, since you don’t know whether your business could get “dethroned” the next year, so to speak. This gives us the cue to formulate the following question:
WHY WOULD YOU WANT TO SELL A PROFITABLE BUSINESS?
A lot of personal reasons may be involved in this decision (retirement, enrollment in other ventures, etc.) but selling after the most profitable year will ultimately have you reaping a higher number of rewards from your hard labor. In the hopes of having the best business valuation, Long Island business owners should not wait until success has already knocked on their door.
A sizable number of business owners would feel tempted to remain in charge after a very profitable season, which is not the “wrong” decision, either. However, they should assume the risks associated with this choice if they plan to sell in the future.
If you don’t know how to proceed in order to sell your Long Island business, a good business broker would point you in the right direction and get most tasks done for you, including marketing, paperwork, negotiations, and a fair business valuation. Long Island has a wide array of business brokerage firms that may be willing to assist you, in exchange for affordable rates.