Niche Exit Planning Strategies
Selling a Direct Marketing Business
Business-for-sale markets are susceptible to a variety of influences. As you know, the direct marketing business market has been exceptionally volatile. 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 direct marketing business in the current economic environment.
Although we're optimistic about the economy, we also recognize that it takes the right strategy to sell a direct marketing business in today's market.
Most direct marketing businesses are good business opportunities, a fact that is not going unnoticed by today's discerning buyers.
Timing the Market
Worried about timing? Believe it or not, this could be an advantageous time to put a direct marketing business up for sale. A depressed economy means lower interest rates; lower interest rates increase the number of investors willing to take a chance on direct marketing businesses. As the interest rates rise, it will be more difficult for buyers to make the numbers work in their favor. At Gaebler, we recognize the value of timing the sale of your direct marketing business. But we think it's more important to properly position your business for current market conditions -- whatever they may be.
Leveraging External Resources
Rarely, if ever, do owners sell a direct marketing business without outside assistance. The enlistment of a qualified business broker is an excellent first step. Additionally, you may want to hire professionals for legal, valuation and other functions before you put your business on the market. In most cases, your sale strategy will call for the assistance of outside professionals at various stages throughout the process. Early recruitment makes it easier to execute your strategy without unnecessary interruptions.
The methods for valuing a direct marketing business vary according to your business model and circumstances. However, there are generally three valuation methods appraisers use to determine your company's worth. Appraisals based on the asset method gauge value as a factor of the company's real property and non-tangible assets; appraisals based on the income method consider the business's anticipated revenue. Using recent direct marketing 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. Sellers should take note of the fact that all three valuation methods reward businesses that takes steps to increase assets and income.
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