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Great Outlook for Buying or Selling a Business
in 2007! For those looking to buy or sell a business this year, a new survey indicates that 2007 should provide some great opportunities. The survey, administered by the International Business Brokers Association (IBBA), asked more than 1,900 members throughout the U.S. and 14 other countries about industry trends and their expectations for the economy. Fifty-three percent of the respondents indicated they expect the economy to improve this year. “With this optimistic outlook, and the continuing trend of baby boomers looking to sell and retire, we see great opportunities for both buyers and sellers of businesses in 2007,” said Ron Johnson, IBBA Chair and President of Allen Business Investments, San Ramon, California. “The past few years have been active for business sales, and 87 percent of the survey respondents think business sales will increase in 2007.” IBBA members also indicated they expect the manufacturing, distribution and services sectors to be most attractive to buyers. But, what’s “hot” in one area may be quite different in another. “Geography certainly has a lot do with the industry outlook, and what types of businesses are going on the market,” said Julie Gordon-White, a San Francisco-based IBBA member and Principal of BlueKey Business Brokerage. “In this region, the E-commerce and professional service sectors are really selling fast right now, but the hot industries can vary from region to region.” While the type of business is important, a firm’s track record is also critical. “When buyers look at purchasing a business, they search out potential business opportunities that have a documented history of success,” said Scott Bushkie, IBBA member and President of Cornerstone Business Services, Green Bay, Wisconsin. “Business owners should start preparing a business for sale years in advance to add significant value,” stated Bushkie. What are some of the most important things that a seller can do to make the business more attractive? The top three requirements cited by survey takers include:
Johnson added, “It is amazing how often an owner doesn’t know their firm’s net worth. Often their gut feel for value turns out to be either too high or too low. If a buyer doesn’t properly look into a prospective business before purchase, things could get off to a rocky start.” The survey indicates that, when looking to purchase a business, the three most important things a buyer should consider are:
“These three things are primary indicators of a successful business,” said Johnson. Buying or selling a business is in most cases a one time transaction, and is often the most important deal a business owner will ever make. “Individuals must be prepared and understand what it takes to make the process successful. If it’s something they don’t have experience in, they should seek the help of a professional business broker,” Johnson said.
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