In Southwest Florida, many businesses go through a cycle where business peaks through the winter and spring months. While the volume of business may vary throughout the year, it should be fairly predictable, and expected for an area that is heavily dependent on tourism. So why should it matter what time of year you sell your business? Getting the timing of your business sale right can make a significant difference in the offers you receive, but it can make an even bigger difference with seasonal businesses.
Selling a Business in the Off Season
If a buyer is looking to take over your business in the off-season, they will be doing so when there is less money coming in. The off-season for many businesses is also a time to do preventative maintenance and improvements. So now your buyer is looking at paying both the purchase price and maintenance costs while having to endure the slow season, where cash flow is at its lowest. This may result in them submitting much less money for the business so they can handle the limited cash flow and stay within budget.
Selling a Business in the High Season
Take a look at the opposite scenario. If you decide to sell your business during the high season, buyers who visit it or look at your most recent books will see that it’s doing well. They can see a high volume of cash coming into the business. If they take over now, they will have some cash reserves to get through the slow season. The investment looks less risky and more valuable. Since they will be able to hit the ground running once the deal closes, buyers will be willing to pay more for the same company. Cash flow can make a huge difference when it comes to timing the sale.
The Best Time to Sell a Seasonal Business
The best time to sell your business is when it looks like a good investment. Companies that are more profitable always attract more buyers and higher offers. If you live in Southwest Florida and own a seasonal business, this means that the best time to sell is during the peak season, when cash flow is at its highest. If you hire a business broker to help sell your business, you will get the benefit of selling confidentially. This helps to protect the identity of your company, so you can list it for sale without it having an effect on your seasonal sales.
Publically listing a business for sale is a major risk and can be costly. One of the biggest drawbacks of a public sale is that you subject the business to a high volume of inquiries and visits, many of which are by competitors or people who aren’t seriously interested. Business brokers know how to market a business for sale without revealing its identity, except only to serious buyers.
If you think this is your final season, it would be best to list now. It can be tempting to stay on for one more season and benefit from the profits and increased cash flow, but you will usually make more from the sale if you sell while business is peaking. If you’re not ready to sell, and need more time, take the off-season to prepare and make any necessary improvements that could boost the value of your business. That way when the next season comes around you will be ready to sell.
If you are selling a business in Fort Myers, Naples, Sarasota, or any of the surrounding areas, timing can be a critical factor in how much you make from the sale. If you would like to sell quickly, and take advantage of the high season, contact us at Corporate Investment Business Brokers (CIBB). We can provide you with a free valuation estimate and help you to prepare to list quickly and confidentially, while business is peaking.
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