Part 2 – Understanding the Market and Its Influence on Buyers

Business Sales on July 21st, 2012 Comments Off

Following on from Part 1 – The End Game – Selling your Business, a part of this article stated “the market plays a role in the price you achieve, however what influences the sale price and time to sell the most is how presentable, desirable, marketable and financeable you make it for buyers”.

Lets be honest, what buyers see on news each night will be influencing their decisions.  The constant barrage of negativity has to have some impact and therefore they start believing it blindly without actually questioning it accuracy.

So when a business ready to sell they need to take what is happening in the market seriously – even if it has not impacted your business.  If buyers are being influenced by the bad news, you need to have responses to the following:

  • Is the current market impacting your business?
  • How has it impacted your business?
  • Can you clearly support what you say with facts?

Buyers do not mind if the market has impacted your business as it is expected.  However what they are interested in is the level of impact and how strong your  business is to survive through it.

With the above in mind, sellers need to understand the current market is the smallest of their concerns when selling.  The biggest impact is not what is happening in Europe, the retail vs internet or even the Australian dollar.  These are just hiding what is coming next.

From 1 July 2012 until the year 2029, there is going to be a constant supply of businesses on the market.   The first of the baby boomers turned 65 years old in 2011 and population statistics show the birth rate of baby boomers growing every year for the next 18 years.  Therefore it is going to be a buyers market for sometime.

Armed with this knowledge sellers need to ensure they structure their business properly to give it every chance of selling.  This includes pricing the business accordingly, financials up to date, secure leases, openness during the sale process and understanding what is motivating the buyer to consider your business.

Good businesses will sell.  The market will play a role in the price you achieve, however what influences the sale price and time to sell the most is how presentable,
desirable, marketable and financeable you make it for buyers.

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