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How is the economy impacting business sales?
Selling a business in today's economy
In today’s economy, it can be challenging for buyers to find strong, profitable, growing businesses that are for sale. If you are fortunate enough to own a company in this category, you can expect a significant amount of interest from buyers.
However, while many buyers are looking for businesses that are growing, it is still possible to sell a business that has suffered financially as a result of the economy, even if revenues and income are still down compared to pre-2008 levels.
Today’s buyers also tend to be risk-averse, and are actively looking for ways to minimize their potential risk in their investment. We have seen an increase in buyer use of earn-outs and other forms of contingent compensation. We are also seeing more use of hold-backs, which is a portion of the price held back (generally in an escrow account) for several months, to ensure there are no undisclosed problems with the business. You can also expect to see a significant amount of scrutiny as buyers want to ensure they understand your business before making a financial commitment. This often means a longer sales cycle and longer due diligence period.
Other Frequently Asked Questions"
How much is my business worth?
How long does it take to sell a company?
When is the best time to sell a company?
When should I tell employees about a potential sale?
