Buying or Selling a Business

Why might buying or selling a business be a good idea during the economic downturn?

1. If you have the cash or can get hold of it now could be a good time to acquire a business either to strengthen your position in your key markets or enter into new but complimentary markets. There will be weak competitors who are not as SMART as you are who as a result are fatally weakened so you could buy them out, although hiring their best employees can be an easier and cheaper way to get their business.

2. However be careful - over 70% of acquisitions fail to achieve their objectives, so be honest as to why you are doing any deal, take advice particularly in structuring the deal, and do your due diligence.

3. Equally if you don’t fancy battling through the next 18 months to 2 years then there is the option to sell. The timing may be ideal, but if you can get a cash lump sum you are happy with, there could be good lifestyle reasons for doing so.

4. If you are going to sell treat it as a sales and marketing exercise and choose advisors who will research the market thoroughly. Remember that the best buyer for your business might be somebody you would not have thought of as the obvious choice. Make sure your advisors run the process for maximum value and create some competition to buy your company.