What’s your business worth in the current economic climate

In spite of reports that consumer spending is buoyant, governments around the world, at their highest levels, are not prepared to forecast a date for full recovery from the current Global Financial Crisis.  So, how is ‘near recession’ impacting on the worth of your business?

The economic situation has killed the market, When the bottom fell out of the US stock market in August, 2008, the global shockwave brought everything to a shuddering halt. When we tracked inquiries from buyers in our office we found that inquiries dropped 80 per cent last year.

This is good news for businesses surviving the current economic downtown. Businesses experiencing steady or increased profit margins could be worth even more than they were before the financial crisis.

It is true that the Global Financial Crisis (GFC) knocked the stuffing out of the share market when it hit in 2008. and it is true that there is no leading economist prepared to forecast an end to the current ‘near recession’. It is also true that the value of most business has declined. however, good businesses could still hold their price.

For businesses deciding to sell, the good news is that financial uncertainty always breeds investors and potential business owners who see tough times as a chance to get a good deal. And if your business is surviving these tough times, the news gets better.

As long as it is not going down and makes a sustaining income, the business is valuable and buyers will always have you on their radar. Purchasing any business during a financial slowdown is often motivated by the desire to realise a good profit when times get better. The downside is that when selling now you will have to be even more realistic about your price. This does not mean giving away your business to bargain hunters. It means truly satisfying yourself that you are getting what it’s worth.

Share

You will close the deal if you let the buyer see everything

Playing your cards close to your chest may be the way to go in business, but not if you are trying to sell it for the best price.

So you have a potential buyer for your business. Congratulations! Marketing or advertising your business has paid off…so far.

Only when a prospect is sure that your business is going to go on making money into the future will you be able to close the deal. So the mantra is: “Don’t look as if you are holding back. Give them everything.”

Getting people to look at the sale of your business more closely is admirable, but getting the deal across the line is a whole other ball game. It usually means full access to all paperwork. Be prepared to go into everything, so the purchaser of your business can see where the good supersedes the difficulty.

Transparency

Your business operations must be transparent. If it’s all too much homework, raises too many questions or just looks too har, the chances are you may lose your buyer.

If they don’t understand your business quickly they will lose confidence.

You can give a buyer “everything” without having to give away your best trade secrets if you focus on what’s in it for them. Brush up your track record. Lay out your business potential. Reveal hidden strategies and point out where further savings can be made.

Zoran Sarabaca

Principal

Xcllusive

Share