Advice on Niche Market Exit Planning
Selling a Trenching Machines and Equipment Business
Market shifts affect business values and the trenching machines and equipment business industry has seen more than its share of fluctuations in business values. Many sellers have exited their companies under less-than-ideal circumstances. Yet it's still possible to achieve personal and professional goals when selling a trenching machines and equipment business during challenging economic times.
Business buyers are a timid lot, even more so now that they are facing an uncertain economic landscape.
Many business owners don't know that trenching machines and equipment businesses are still a hot commodity, to the extent that sellers have properly prepared them for the marketplace.
Advantages of Hiring a Broker
Brokers give trenching machines and equipment business sellers distinct advantages in the marketplace. Right out of the gate, brokers know how to help their clients properly prepare their businesses for a sale. More importantly, brokers have the ability to identify serious buyers and maintain confidentiality throughout the sale process. Typical brokerage rates (a.k.a. success fees) run 10% of the final price - an expense that is usually recouped through a higher sales price and less time on the market.
Current Market Conditions
At first glance, today's market would seem to be a hostile place for trenching machines and equipment business sellers. So far, government intervention and promises that the economy is slowly recovering haven't been enough to alleviate many entrepreneur's fears. However, many business sellers don't realize that a full economic rebound can have devastating consequences, particularly if sellers who have waited to list their businesses suddenly create a glut in the business-for-sale marketplace. The simple truth is that the economy shouldn't dictate whether or not now is the right time to sell a trenching machines and equipment business. Your individual circumstances and personal goals are more influential factors in determining when it's time to put your business on the market.
Business Valuation
Professional appraisers can use three methods to determine the value ofa trenching machines and equipment business: The income method, the asset method and the market method. The income method determines value based on the amount of income the business is expected to generate. The asset method, on the other hand, is based on the value of tangible and non-tangible assets (e.g. brands and trademarks). Using recent trenching machines and equipment business sales as its foundation, the market method factors market conditions into the valuation process. A good appraiser will often use multiple valuation methods to arrive at a reasonable estimate. But regardless of the method that is used, it's always in the seller's best interest to increase revenue and asset values prior to a sale.
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