State of the Market: Selling Your Business in 2020

Every business owner will exit their business someday, but deciding when comes down to several factors. If you’re considering kicking off the new decade by selling your business, it’s critical to stay apprised of business trends. Doing so can help you determine if it’s a good time to sell, set expectations for the sale, and maximize your profits. We dive into the results of the M&A Source and the International Business Brokers Association’s (IBBA)  Q3 2019 Market Pulse Report to help you determine if selling your business in 2020 is the right move for you.

Should You Consider Selling Your Business in 2020?

a business broker draws statistics regarding the current sellers market

The decision to sell often comes out of a combination of personal and financial factors but understanding the state of the market can be crucial to a successful sale. So, what’s on our radar right now? Concerns over the possibility of a recession have lowered valuations for small businesses, but there are still lower Middle Market sales earning above expected prices. A few markets stand out and, if your business falls under one of them, it may be an excellent time to cash in on your hard work.

  • Manufacturing

    After several years of decline, the manufacturing sector is poised for a major comeback. Rapid changes in technology have digitally-transformed manufacturing, and these trends aren’t stopping anytime soon. With these changes, other existing companies and private equity firms are on the hunt for strategic acquisitions. If you’re considering leaving your business, it may be the perfect time to list your manufacturing company.

  • Construction and Engineering

    Not unlike the manufacturing industry, these sectors are at the forefront of a technological revolution. In particular, companies involved in the manufacturing of machine tools are consistently attractive to buyers. Expect that buyers looking for a construction or engineering company for sale will have a lot of questions about the assets included in the sale.

  • Biotechnology and Health

    Last but not least, the health and wellness industry continues to climb. With at least $179 billion invested in health equity in the U.S. over the last 20 years, the demand for health-based businesses follows suit. Biotechnology, applied to both pharmaceuticals and agriculture, is also a hot commodity for business buyers right now.

What About Main Street Businesses?

Sales for Main Street businesses hinge on the confidence of buyers in the economy. Concerns about a possible recession, as well as the oncoming election season, have driven down business valuations for this market. Still, if you’re a small business owner and are thinking about retiring or have your eyes on a new business idea, there’s no such thing as a wrong time to start planning your exit. Selling a business doesn’t occur overnight, and meeting with a professional advisor can help you determine the best exit strategy for you. Plus, proper planning will give you time to begin addressing any weak points in your business to ensure a successful business transaction.

Whether you’re ready to sell in the new year or are considering your options down the line, working with a business broker will help you make sense of the process. For a confidential, no-obligation discussion, contact your local Sunbelt office. You can count on our brokers to ensure your needs are met throughout every step of the sale, from initial exit planning and valuation to a smooth closure.

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