Niche Exit Planning Strategies
Selling a Debt Collection Service
Despite the pessimistic mood of many sellers, your debt collection service can be a high value acquisition target for ambitious entrepreneurs -- even in today's tough economy.
These days, the small and medium-sized business market is more confusing than ever before. Although there are plenty of entrepreneurs who want to buy a debt collection service, capital restrictions are holding them back.
However, serious buyers also understand the value of a good debt collection service. So for debt collection service sellers, today's market is all about convincing buyers that the numbers make their companies worth the asking price.
When Is the Right Time to Sell?
When is it the right time to sell your debt collection service? If you're asking the question, now may be the time to put your business on the market. Opinions are mixed and some consultants are advising debt collection service sellers to put their plans on hold until the economy fully rebounds. We aren't nearly as pessimistic about the debt collection service marketplace. The inventory of what we consider to be quality debt collection services is actually low right now and there is room for the right sellers to realize substantial gains with investment-conscious buyers.
Leveraging External Resources
Rarely, if ever, do owners sell a debt collection service without outside assistance. Although it's wise to recruit a business broker, brokerage isn't your only concern. Additionally, you may want to hire professionals for legal, valuation and other functions before you put your business on the market. The early recruitment of external resources reduces your risk and results in a more predictable final outcome.
Seller Financing
Capital is hard to come by these days. Financial institutions have tightened up their lending policies, making it difficult for inexperienced and undercapitalized entrepreneurs to buy debt collection services. As a result, buyers expect sellers to finance a significant portion of the sale. Although 100% seller financing isn't recommended, sellers are financing up to 70% of the sale price to close deals.
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