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The Best Time To Sell A Business Could Be Right Now!
The Dow Jones close  d at an all-time high on Friday, September 19, 2014. And the NASDAQ and S&P were within ¼ of 1% of their all-time highs. As a result, corporations, private equity groups, and individual investors are flush with cash - trillions of dollars.
Where can they go with all that cash? Interest rates are so low that fixed income investments are not attractive. Whereas it's typical to have a stock market correction (10% tumble) about once every 1 1/2 years, it's been almost 3 years since the last correction. With international tensions in Ukraine, Russia, Iran and the Islamic radical group ISIS setting its sights on terrorizing the US economy, how much longer can the (stock market) good times last? Where can that cash best be used to achieve adequate returns on investment? The answer - business acquisitions.
The buyer demand for good businesses with good cash flow has always exceeded the supply of good businesses available for acquisition. However, with buyers having more cash than ever, the numbers of interested buyers can only increase. In addition, interest rates are extremely low, enabling buyers to finance their acquisitions at reasonable rates.
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In Home Therapy
In Home Therapy is a home health staffing company providing in home rehabilitation services in Houston. The Seller, Jane Fontenot, was ready to retire after founding the company and running it since 2007.
After receiving five offers to purchase the business, the Seller chose Harold Gullung as the new owner. Gullung, a CPA and an executive in the oil and gas industry, had been searching for a business for one year before finding this well-established enterprise. With his background and the business' year-over-year growth for five consecutive years and well-maintained financials, was able to obtain SBA financing for the acquisition.
Ryan DeGennaro listed and sold the business.
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Bricks 4 Kidz
Bricks 4 Kidz is an after school learning franchise that ranked #1 children's enrichment program by Entrepreneur Magazine in January 2014. Programs offered are for children ages 3-13+ and are offered through after-school classes at private and public schools, week-long summer camps, birthday parties, and preschool classes.
The Seller, Michalyn Porter, a Ph.D. with a recent newborn, decided to sell the business to have more time to spend with her family. She also plans to teach science part time at a local public school. The Buyer, Caroline Pulford, is a stay-at-home mom of three children ages 2, 4 & 8 with a 10-year professional background in marketing and communications.
Both The Buyer and The Seller were on the market for less than five months before closing their deal.
Marcia Bowron listed and sold the business.
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Sandcastle Montessori Academy
This Montessori academy and child care center has been in operation for 30 years in an upscale northwest area of Houston. Due to health issues, the former owner, Diana Mulin, decided to sell the business. With several interested parties making offers at the same time, it was sold within two months of going to market.
Jay Yoo listed the business and Doug Ashby sold the business.
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Ask The Experts
Question:
When is the right time to request a meeting with the seller of a business that I'm interested in....and what is expected during the meeting?
Answer:
An appointment for a buyer and seller to meet is usually made when a buyer is considering making an offer to purchase the business. The buyer would have already reviewed the business profile and financials, and asked preliminary questions that had been answered by the broker. It is common for business owners to require that all such meetings be during non-operating hours to avoid premature disclosure to employees and customers.
This is the chance for the buyer to tour the facilities, to learn about the operations of the business, the employees, the growth opportunities, the financial aspects of running the business, and to get a feel for what it would be like to walk in the owner's shoes. However, this meeting is not the time to discuss the price and terms of the sale. The business broker is the intermediary and will be the liaison for the two parties on that subject.
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Texas Economic News
