Analyzing the Health of Your Industry Sector and Overall Market – Deciding How to Proceed

When selling your business, you need to assess the condition of your industry and marketplace.

Deciding How to Proceed

If you’ve waded through the contents of this paper, you know the kinds of attributes buyers seek, the kinds of risks they avoid, and the factors they consider when assessing whether a business seems to be a good purchase prospect. By applying the information to your own business situation, this paper provides you the information to determine how your business rates as a sale prospect. Based on this knowledge, you can decide which of the following four actions to take.

1. Launch the sale process with confidence, because your business is on an upward trend (and therefore attractive to buyers) and your operations and clients are ready to transfer efficiently into the new owner’s hands.
2. Delay your sale launch while you right wrongs by improving the financial, marketing, and operating challenges of your business. Realize that the project of getting your business into a more marketable condition before offering it for sale will likely take month, or even a year or more, so plan accordingly.
3. Launch the sale process knowing you need to plan around your business, industry, or marketplace deficiencies by setting a lower sale price than a more attractive business would likely win, and then by making a strong case for the opportunity that awaits a buyer able to invest expertise and financial resources that you weren’t able to apply to the situation.
4. Get out quick by liquidating and selling physical assets to offset liabilities and avoid further financial risk.

How you decide to proceed is dependent on the personal situation that’s motivating your business exit, the condition and sale-readiness of your business, and the timeline you want to follow.

Whether you decide to sell as quickly as possible or following a preparation period during which you get your business into prime selling condition has a lot to do with how much you can command in sales price. It’s the old fire-sale rationale: Damaged or out-of-season goods sell at discounted prices, if at all.

As you plan your next steps, consider the following questions:

• Based on everything you’ve read in this paper, is your business ready for a sale right now?
• Do you need to sell right now?
• If your business isn’t ready, can you make time to get it into sale-ready shape?
• If your business isn’t ready and you can’t make time to get it into sale-ready shape, are you prepared to discount your asking price as a way to compensate for financial or operating deficiencies?

Remember: Your business will sell for what a buyer thinks its worth. As a result, how much you get for your business goes hand-in-hand with how much time and effort you can devote to the process of getting it into sale-ready shape.

This information was taken from “Selling Your Business for Dummies” by John Davies (Founder of Sunbelt) and Barbara Findlay Schneck