Is this the year that you sell your business? With many businesses recovering after a challenging couple of years, some business owners are reevaluating the future and looking at the current market conditions for selling a business. While each situation is unique, there are some good reasons to consider selling your business this year. Before you do anything, take a look at our list of the top 10 reasons to sell your business.
10 Reasons To Sell Your Business
- It’s a seller’s market
The current business sales market is hot with the demand for profitable businesses for sale exceeding the number of businesses on the market. A combination of investors and individuals who are interested in purchasing a business for the first time is driving this demand.
- Interest rates are still low
Even with Canadian interest rates poised to increase later this year, rates are still historically very low. Despite rate hikes on the horizon, the impact on buyers is not expected to be significant. Buyers will still have excellent access to capital and will be motivated to take advantage of low rates.
- Buyer demand is up
2021 saw a lot of buyer demand for profitable businesses, particularly in the form of cash offers from private equity firms. Demand is also driven by people leaving the corporate sector to fulfill a desire to become self-employed.
- Fewer sellers on the market
Many business owners are still focused on pandemic-related recovery efforts and not currently looking to sell their business anytime soon. High buyer demand and reduced inventory of businesses for sale are resulting in higher valuations and higher sales prices.
- Ongoing labour shortages
The continued struggle to find labour is being felt across all sectors. For small business owners, the burden of maintaining operations in the context of long-term labour shortages usually means working longer hours and struggling with burnout and exhaustion. For some owners, the personal burden is no longer sustainable and is prompting plans to exit and sell their business.
- Strike while the market is hot
A hot market doesn’t stay hot forever. While market trends are not the only reasons to sell a business, you don’t want to miss an opportunity to negotiate a good deal. If you have already implemented the initial steps of your small business exit strategy, take advantage of this seller’s market while you can. A huge surge of sellers could cool things off substantially.
- You don’t have a crystal ball
If the past couple of years has taught us anything, it’s that adapting to change is exhausting work. If future-proofing your business seems like an impossible task you’re not sure you want to tackle, it may be worth considering your exit. And while it isn’t a crystal ball either, our free Business Valuation Calculator can give you a ballpark selling price for your business.
- Business sales prices are up
Sales prices for businesses continue their upward trend in 2022. Rising sales prices are largely driven by the low supply of businesses for sale leaving high demand for potential buyers.
- Rising business costs and operational challenges
Hand-in-hand with labour shortages, ongoing challenges in terms of supply chain issues and rising costs are common reasons for selling that business owners have.
- It is time
While market trends are important to consider before deciding to sell, the best time to sell a business is when you are ready to sell. If you have been diligent in planning your business exit strategy, you will have a good idea of what conditions need to be in place before you can take the next step.
If you have been thinking about selling and want to discuss whether it is a good time to sell your business, request a consultation. Alberta Business Sales has experienced brokers in both Calgary and Edmonton who can offer professional advice as you navigate the process of selling a business.