Is my business salable? This is a question all business owners ponder at some point in their business ownership journey and it is important to keep in mind as an owner. Planning for a future exit or being prepared for an unexpected change of circumstances is a great way to provide yourself and your family peace of mind. In the following article, I will take on this subject and ultimately share the answer with you.
While there are many variables that intersect and create an opportunity for sale (or not), at the end of the day the market will dictate whether your company is salable. While exploring opportunities to purchase a business, every buyer hopes for perfect financial records, perfect tax returns, a well-developed employee structure, and varying procedural manuals, because, of course, this would be very ideal. However, you would be hard-pressed to find a business that is truly perfect and able to check all the requisite boxes. Nothing in business is ever perfect because companies are always evolving and changing along with the economy and market trends.
While there may never be the elusive “perfect” business, I firmly believe there is a buyer for every business. It is simply a function of placing the right value on the company and at the right time. This topic brings me back to a story a colleague relayed to me a number of years ago at this point. The story goes that there was a business located in a swamp. A business that bred mice to be sold to zoos as food for snakes and other scaled creatures. The owner needed to sell and had the business priced at $150,000. The business had no books and the records consisted of a shoebox with one single, crumpled receipt. This situation sounds pretty less than ideal from a selling and a purchasing standpoint.
But I bet you guessed it! That company sold and it sold in only 8 days, no less! That business sold for the full asking price and to this day the buyer continues to run this business, a business located in a swamp. So the moral of the story is this, yes, your business is salable! As long as the price is right, and the timing is right – there is a buyer for every type of company. So to conclude, it is important to plan for a future exit from your business as early as possible to ensure that you will be able to exit as needed and for the optimal return you are hoping for.