Advice on Niche Market Exit Planning
Selling a Tickings Business
There are few things as intimidating as selling a business in a sluggish economy. Although it's going to take some work, there is a good chance you can still sell your company at or even above fair market value.
These days, the prospect of selling a tickings business is so daunting that many would-be sellers are biding their time, waiting for a break in the economic clouds.
Many business owners don't know that tickings businesses are still a hot commodity, to the extent that sellers have properly prepared them for the marketplace.
Average Preparation Time
Preparing a tickings business sale takes time. Buyers want to see growth trends, healthy profits and other variables that increase the likelihood of long-term success. Next, the business will need to be documented in professional financial statements and manuals that facilitate the ownership transition. Since all of this takes time and effort, a tickings business can rarely be ready for the marketplace in less than six months. A more likely scenario is that it will take more than a year to create the conditions necessary to receive the maximum sale price.
Adjusting Expectations
Every business seller dreams of a fast sale and a fat payday. But it's highly unlikely that the sale will meet all of your expectations, especially if your initial estimates were created without the benefit of a solid appraisal or market knowledge. Surprises are inevitable, so to minimize the disappointment you will need to prioritize the outcomes you require from the sale. If buyers don't seem to be willing to meet your expectations, consult with your broker to modify your strategy and market approach.
Seller Financing
The shortage in today's marketplace isn't interested buyers -- it's capital. Financial institutions have tightened up their lending policies, making it difficult for inexperienced and undercapitalized entrepreneurs to buy tickings businesses. As a result, buyers expect sellers to finance a significant portion of the sale. It's common for sellers to finance as much as 70% of the purchase price with a payoff period of four or five years, sometimes in the form of a balloon payment at the end of the repayment period.
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