Have you ever noticed that fire trucks always back into the fire hall?
Why don’t they just pull into their parking spot snout-forward like the rest of us?
Backing in at the end of a shift saves them time when they have to get to a fire. They back in to be ready; whether the call comes in 5 minutes or 5 days, they are prepared to pull out as quickly as possible.
Like the firemen, you, as a business owner, need to be ready when you get the call from someone who wants to buy your business. And these days, owners are getting that call more often.
According to the latest Sellability Tracker report, the proportion of business owners who received an offer to buy their business in the quarter ending March 31, 2014 was up considerably from Q4 2013. Roughly 12% of business owners using The Sellability Score last quarter had recently received an offer to buy their business.
The proportion of owners getting an offer is an important statistic because it measures one half of the equation of a business sale. For a transaction to take place, there must be both a willing seller and a willing buyer.
Buyers are becoming more acquisitive because they have access to more cash than they know what to do with. Interest rates are next to nothing, and after the liquidity crisis of 2008, larger businesses have been socking away profits on their balance sheet for a rainy day.
This increase in acquisitiveness among buyers has important implications for you as a business owner. The most important among them is that you need to have a sellable asset when opportunity strikes.
Statistically speaking, the two most common reasons you are likely to sell your business are:
- A health scare;
- An unsolicited offer to buy your business.
As unsolicited offers increase, so too does the need for you to be ready if an opportunity comes your way. Unlike an owner who is in control of when they decide to list a property, the hallmark of an unsolicited offer is the fact the owner doesn’t know when it’s going to happen; which means you need to operate your business as if an offer is always around the corner.
Businesses that are sloppily run with shoddy bookkeeping, too much customer concentration or a high level of dependency on you as owner will end up being passed over for turnkey operations.
The time is now for you to get your business ready to showcase when opportunity comes knocking.