sell my company

Sell my company?

I remember sitting in my office of the last company I owned and feeling so blessed about how much we accomplished since 2008 when the great recession hit us so hard that we almost lost everything. I was reflecting on what we had accomplished the last couple of years as the company was running on autopilot, our company culture was excellent, and our customer satisfaction was at an all-time high. Yet, I thought to myself I think I want to sell my company.

After all, the economy is really heating up, I’m not getting any younger, and I want to try something different, and fulfill my passion. Also, most of my wealth is the value of my business, and why not get out of debt and sell while the economy is good?
Many of you reading this may be in a similar situation, and thinking to yourself or mentioning to others “I think I want to sell my company”.  I took out a piece of paper and weighed the pros and cons and the thing that really struck a chord for me was cash in on the wealth and go after my passion helping others, teaching, coaching, and mentoring them.
If your seriously contemplating selling, now may be a good time, as the market has been really hot the last several years. I personally sold three (3) businesses in June alone – a manufacturing company, a collision repair business and building, and an auto and commercial flat glass company.

What are the facts?

Here is the 2019 First Quarter Market Pulse Survey

Who has the advantage:
buyers or sellers?

Advisors believe that sellers hold the advantage in all market segments except the smallest. Year-over-year, however, shows a slight decline in confidence across all sectors except for businesses with $5 million to
$50 million in enterprise value.
“Although it is still a strong seller’s market with strong values, this is the first time in years that we’ve seen four out of five sectors report a dip in seller market sentiment,” said Craig Everett, Ph.D., director of the Pepperdine Private Capital Markets Project. “This is a sign the market has peaked, and more people are expecting a correction in the year or two ahead.” “For those sellers who are having an emotionally hard time letting go, it’s most likely go now or wait another five to seven years before the market will cycle back up to current conditions,” Everett continued. “To be clear, this doesn’t mean you won’t be able to sell your business over the next five years, but you probably won’t get the multiples you can get today. Any market pessimism or uncertainty will drive down value across the board.”

Where are business values trending?
In Q1, final sale prices came in anywhere from 85% to 101% of the pre-set asking price or internal benchmark. Lower middle-market companies in the $5 million to $50 million range achieved the highest values at 101% of the benchmark.

My Personal Experience
I’ve been averaging about one business sale per month and they have all been full-price offers this year and last year. There are still a lot of qualified buyers looking to acquire a good business and now thru Q3 has always been the months with the most activity. As more “boomers” begin to retire, I suspect more listings will flood the market and could potentially bring multiples down.

Lastly, it’s always a good idea to create a non-owner dependent business, with a strong management team in place that will help you fetch a higher price for a nicer retirement.

Contact me if I can be of service or answer any questions you may have or 720-436-1472.