Advice on Niche Market Exit Planning
Selling a Towing Equipment Business
Business-for-sale markets are susceptible to a variety of influences. As you know, the towing equipment business market has been exceptionally volatile. Here's what you'll need to know to sell a towing equipment business during challenging economic times.
According to the experts, there is currently a large volume of shadow inventory in the towing equipment business market -- businesses that are waiting to be listed until the economy recovers.
If your exit strategy involves selling a towing equipment business now, business sellers may need to apply a combination of incentives and techniques.
Current Market Conditions
No one plans to sell a towing equipment business 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 towing equipment business as attractive as possible so to buyers right now.
Seller Financing
Capital is hard to come by these days. Banks and other lending institutions aren't eager to lend to unproven and undercapitalized towing equipment business buyers regardless of the business's potential. Rather than abandon their plans entirely, many buyers are pursuing finance concessions from sellers. It's common for sellers to finance as much as 70% of the purchase price with a payoff period of four or five years, sometimes in the form of a balloon payment at the end of the repayment period.
Benefits of Third-Party Assistance
Rarely, if ever, do owners sell a towing equipment business without outside assistance. Brokers can be an important resource for your sale, especially if you are unfamiliar with the business-for-sale marketplace. 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.
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