One of the first things I tell business owners when they call me is, "The good news is - we're in a very strong seller's market." And that's true. Depending on the industry, location, and size of the business, it's not unusual to have over 100 interested buyers for every business that comes to market.
The reason is simple. Books, podcasts, search funds, online communities, and SBA financing have educated a new generation of business buyers and have made buying a business more accessible than ever before. And there is more capital available after years of strong stock market returns than before.
But, having such high demand does not mean these buyers pay unreasonable prices.
Today's buyers are well educated. They understand valuation, they recognize risk, and they know what they're looking at. Owner dependency, customer concentration, an expiring lease, inconsistent financials do not automatically kill a deal, but they do affect value and narrow the pool of interested buyers.
The good news is that attractive businesses still generate competition, and competition creates leverage. Buyers know there are plenty of others looking at the same opportunity, so strong businesses with realistic asking prices continue to trade well.
If you're thinking about selling, don't confuse a seller's market with a blank check. The market is giving owners a tremendous opportunity, but preparation and realistic pricing still matter.
Whether you're thinking about selling in six months or five years, I'd be happy to tell you how today's buyers are likely to view your business and help you build a strategy to maximize your outcome.
What are businesses in your industry selling for? Request a complimentary Industry Multiples Insight.
