29 Dec Market Timing and Why Some Sellers Need to Act Now
You’ve worked hard to build your business, so it’s essential to get the highest return on your investment. There are three main areas to keep in mind: how ready you are on a personal level, how much you’ve optimized your business, and current market conditions. It’s a lot to think about, especially while you are running a business. That’s why so many business leaders turn to qualified M&A advisors to guide them through the process, especially in understanding market timing.
As the business owner, you play the key part in ensuring that your value drivers are high. Over time, elements such as sales, marketing and savvy planning will increase the value of your business. It’s also important to take a look at the goals you’d like to achieve and if they are viable. When we refer to personal readiness, we mean how ready are you to close this chapter of your life and open a new one.
Lastly, consideration of whether or not it is the right time to sell must include an assessment of the capital markets. These factors, of course, are outside of your control as the seller. Each market cycle lasts about ten years, from “sell” to “hold” to “buy”. Many analysts that cover the information technology industry think the current sellers’ market, with lots of buyers and high valuations, began around 2013 and will probably slow down by 2017 or 2018.
An Advisor Will Help You Strategize
You have a certain amount of resources at your disposal right now. Is your current level of success the highest you can reach under the current conditions? M&A advisors can tell you what’s going on with transactions in your industry. Wealth management advisors have studied market trends and can help you predict what the public markets should be like at the time you plan to sell.
Get some assistance in order to confirm your ideal targets for what you’d like to achieve as your business grows. If it hasn’t been adequate and you are fairly confident that you can meet your financial goals through a sale, it may be time for an exit plan.
Many Top Wealth Advisors Say “Don’t Dawdle”
If the current conditions are favorable for your business, you might be tempted to wait to see if things get even better. However, many top wealth advisors agree that the best strategy is to act now. Those who wait for the peak of the economic cycle often get burned. Of course, under some conditions a business owner must sell regardless of whether the timing is ideal. These circumstances include situations such as divorce, partnership issues and/or death of a shareholder.
Qualified pros will let you know when the timing is ideal and will give you valuable insights in regard to the demand for your business at any given point in time. These seasoned professionals will help you make valuable business improvements and also tell you if it makes more sense to sell right away or “hold, grow value and sell later.”