By Keith Payne Licensed Business Broker, Sunbelt Business Advisor and Independent Insurance Specialists
Many business owners that we meet with are often wondering if the time is right to considering selling their business. Often times they believe to have “the ideal or incumbent buyer” that they feel will be able to take over the business. With that, I thought it may be helpful to share some professional and market insights on this:
- Most business owners have never sold a company before. As the S&P 500 decline 25%+ YTD, it’s easy to assume that private company valuations will decline as well. The fact is that private company multiples tend to be less volatile.
- On average, Sunbelt’s cash flow multiple is higher than total closed transactions in the Market area
- In 2021, Sunbelt closed on 138 business listings
- YTD in 2022, we are on pace to exceed that number
- The “ideal or incumbent buyer” rarely if ever makes it across the finish line
- These buyers who are closest to the business feel that they know as much if not more than the current owner
- Based on this perceived knowledge, they will more than likely pay the least for the business
- If you are speaking with this type of buyer, what’s your back-up plan?
At a minimum, have us here at Sunbelt provide you a confidential, no-cost, no-obligation Value Range Assessment. This will at least provide you our opinion of what your business will sell for. The best business owners know what their companies are worth. Multiples vary based on industry and company size. If you are thinking about selling in the next 2 years contact us today for a complimentary value range analysis.
Keith Payne
BUSINESS BROKER
Independent Insurance Specialist
DIRECT NUMBER: 612-730-1030
EMAIL: kpayne@sunbeltmidwest.com
About Sunbelt Business Advisors of Minnesota
The Sunbelt Business Advisors Minneapolis office is the largest office in the Sunbelt network with a staff of over 50 advisors, associates, analysts, and business development representatives. In 2021 the firm was recognized by the International Business Brokers Association as the #1 firm in the country and the first firm in history to sweep all three first-in class awards. Sunbelt provides services to business owners interested in selling their businesses, assistance with merger and acquisition activities, complimentary business value assessments, and advice to business owners seeking to maximize their life’s work when they exit. The firm provides business brokerage and mergers & acquisitions services for companies with revenues from $500,000 to $150 million. More information is available at www.sunbeltmidwest.com (<Under $5 million revenue) and www.tnma.com ($5 – $150 million in revenue).
