Small Business Finance News
Experts: Small Business Owners Often Sell Too Late
Written by Jenna Weiner
Published: 6/29/2010
Small business owners who wait too long to sell their company may be reducing its selling price.
Selling a business is a big step for a small business owner, who has often built the company from the ground up. But waiting until the end to sell the company can often lead to much lower selling prices, according to the Pittsburgh Post-Gazette.
Potential buyers for a company will often pounce on opportunities when a business owner is in poor health and needs to sell the company quickly. That need gives the buyer a stronger negotiating position - bad news for small business owners looking to get out.
According to the paper, the best time to sell the company is when things are going well and the owner is still going strong. But that timing often isn't ideal to many, who enjoy what they are doing.
"Many owners choose to stay forever as there is nothing else they would rather do," Fred Rock, managing director of Focus Investment Banking, told the paper. "As long as these owners recognize that the result could be a sale after their death at a significantly lower value than what the owner could have gotten, this becomes an informed decision."
Not being prepared for a sale can often be the worst thing for a small business owner. The Omaha World-Herald reports that many businesses that can't find a buyer end up just selling off their inventory and assets.
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