If you want to do a business exit or sale at the “right” time, then it requires being properly prepared to enter the market when these three conditions exist:
- The economy is expanding
- Your business is growing
- You are ready personally and financially
If you have survived the recession, stabilized your business, and are setting your sights on a healthy retirement, now is the time to begin focusing on these three targets. Let us first consider timing your business exit or sale during an expanding economy.
Looking at the past thirty years, we have seen the market start down at the beginning of each decade, run up to a peak, and then crash by the beginning of the next.
1980’s Started in recession – experienced unprecedented job/GDP growth – crashed with Savings & Loan debacle.
1990’s Started in recession – grew through globalization and technology – crashed with the internet bubble burst.
2000’s Started in recession – grew with low interest and inflation – ended with real estate market crash.
2010’s Started in recession – with 7.5 years to go?
While it is difficult to predict the future, we could assume that this decade and the next could cycle up and down much like the previous decades. If this holds true, you want to consider your timing during an expanding economy to be within a few years of 2015 or 2025.
Many of the owners I am working with today, I first met between 2004 and 2008. They invited me in to talk because they suspected it was a good time to consider a sale. Those that waved off the opportunity during that expanding economy and period of business growth did so because they were simply not personally ready.
As we discuss the recent past and look towards the future, they feel a little more anxiety about focusing on their timing. I understand why.
In the last decade, they were only 45 to 55 years old and feeling a little too young to retire. In this decade, they will be 55 to 65 years old, and they realize that by the middle of the next decade they will be 65 to 75 years old.
As we work towards growing their business from here, and recognize that economic forces could once again negatively affect their value in ten years from today, we are diligently focusing on preparing for readiness by 2015.