Intimidated by a sluggish economy, business buyers are more cautious than ever.
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In order to market an architectural design firm in this environment, sellers need to make a strong case for buyers to purchase at or near the asking price.
What About Market Conditions?
No one plans to sell an architectural design firm in a down economy. 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. So what's our point? The economy isn't the most important factor in the sale of your business. Instead, you should be focusing on making your architectural design firm as attractive as possible so to buyers right now.
In an architectural design firm sale, the Letter of Intent contains the vital elements of the deal between the buyer and the seller . The price described in the Letter of Intent may fluctuate based on information that is revealed during due diligence, but the inclusion of new requirements in the final contract could be a deal killer. For sellers, that makes a close review of the Letter of Intent more than a formality - it's a critical juncture on the path to closing.
Selling an Architectural Design Firm to an Employee
There are both benefits and drawbacks to selling an architectural design firm to an employee. A key employee may seem like a natural sales prospect. The time and expense of locating the right buyer will be nonexistent and you won't have to spend weeks showing the buyer every square inch of the company. Yet most employees lack the means to buy their employer's business at or near the asking price. Most of the time, employees also expect owners to finance a large portion of the sale. So if you aren't willing to finance the sale or need to get top dollar for your architectural design firm, a sale to an employee is probably not a possibility.
Given your interest in exit planning and in architectural design firms, you might find these additional resources to be of interest.
If you plan on opening an architectural design firm, these helpul resources may be just what you've been looking for:
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