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Should I Sell Now Or Try To Make My Business More Profitable First?

Comments & Replies: 3     Views: 3423     Posted By: Peter Siegel MBA  Peter Siegel MBA: BizBen Founder, ProBuy/ProSell Program Director



Topics: Deal Structures, Selling A Business     Tags: deal structures, selling a business



I hear this question a lot. Is it better to sell now or should I wait and grow the business so it's more profitable and has a higher value? The answer to this question is not simple. Sometimes selling when the market conditions are right may bring higher value to a business than selling at a later date when conditions aren't quite as favorable, even though the business is more profitable. That is why I always stress the importance of hiring a professional to assist you in diagnosing the strengths, weaknesses, opportunities and threats to your business before you make a decision to sell or try to grow your business. Mark Cuban, was once asked why he sold his business when it still had upside. He responded by saying "why would someone want to buy a business if it didn t have upside potential left?" Again, the answer to this question is not a simple one. It requires careful analysis and awareness of a variety of factors such the condition of the market within the industry at a given time, the economic factors outside the industry, future opportunities and or threats and the realities of the business itself. In my opinion his is not a decision you should make on your own.


I couldn't agree more - this is NOT a decision a business owner should make alone.

While it's true that the best time to sell is when the business is doing well, very often significant value can be added to the business. As a Certified Value Builder as well as a licensed business broker, I work with business owners in a SWOT analysis (strengths, weaknesses, opportunities, and threats) to assess the current value of the business and develop a strategic plan, with precise tactical steps, to vastly increase the value of their business over the course of 12-18 months. Then we determine if the time and expense is worth it, or if it's better to sell in the current market.

Sometimes it makes sense to list the business for sale, anticipating the value that will be realized in the next six to twelve months, and let the business "grow into" the asking price.

But, all of these decisions require the expertise of a professional business broker who also has experience and expertise in the hands-on process of business value development.


I too have heard this question many times from sellers, typically it's right after I've told them what their business is worth. Many sellers will say, "well, we are about to do a lot of advertising and so the gross sales should go up, because of the door hangers with coupons we are going to be putting out." It's been my experience that buyers will want to look at the business sales over the last year or two, and so any month of mass coupons or other marketing gimmick isn't satisfying, because in their mind it all comes down to profitability over a significant amount of time.


  Helpful Resources To Assist In Selling And Buying California Businesses
Elizabeth McGovern: Escrow Services - San Francisco Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Brad Steinberg, Business Broker: Laundromat Specialist

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.

William F. Ziprick, Attorney: Legal Services For Buyers And Sellers

Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of successful closings. Office: 909-255-8353, Cell: 509-951-7230.

Shalonda Chappel: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.


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