As we write this, we’re in an election year, and some people get skittish about making big decisions. They worry that a change in political leadership may mean a change in policies that will affect a company’s profitability. That might make some buyers take a “wait and see” approach to purchasing before the election outcome is clear. They may speculate about interest rates, inflation, changes in regulations affecting a particular industry, or a myriad of other issues.
And it’s true that political leadership at the national level has an impact on business. Policies can change international trade agreements, tariffs, taxes and incentives, and interest rates, as we’ve seen over the past couple of years. All these issues can affect the profitability and marketability of your company, but here’s why you shouldn’t worry about them.
First and foremost, they’re all out of your control. You can cast your vote for the guy you think has better ideas, but that’s as much influence as you have. After that, it’s in the hands of policymakers.
And we know from experience that the economy – and the world – can change overnight. Your niche may become distressed or become so hot it’s hard to keep up with demand. The pandemic taught us that. Some companies – travel, hospitality, and others, ground to a halt in just a few weeks. However, manufacturers who produced plastic faceguards, plexiglass partitions, or other pandemic-resistant products saw business increase by as much as 300%. The Work from Home impact had people spending millions on remodeling and home improvement but much less on professional clothing.
The domestic economy impacts every industry, but some companies are more recession-resistant than others. If the economy feels uncertain, buyers may be looking for companies that won’t be severely affected if consumers stop buying, hold onto the vehicles for a few more years, or start eating at home.
If the geopolitical climate changes, there could be a significant increase in defense spending. Government investment in infrastructure could continue to grow. Whatever your business, it has the chance to be influenced by world events and the global economy. But you can’t predict, let alone control any of it.
So, if you’re considering selling your business, it makes much more sense to focus on what you can control. There are three factors that matter when you’re getting ready to sell or retire: Your personal readiness (your financial situation, your goals, your mental and emotional preparedness), your company’s readiness (clean books, organized records, sound operational and management structure), and the market’s readiness, which includes having adequate Buyers interested in your niche, and the availability of financing.
As you focus on getting your company ready to sell, an experienced M&A Advisor or Business Broker becomes your partner in advising you on current market conditions. It’s our job to present your company in a way that attracts the right buyers and to help facilitate a deal that’s the best outcome for you.
Your job as a prospective seller (with your advisors’ help) is to ensure your company is in great shape and ready to sell; that’s definitely within your control. No matter who wins the election or what the global situation is, there are always buyers looking to purchase a well-run and profitable business.
The first step when considering selling your business is to get a confidential and complimentary opinion of its value.
