Fewer sellers, plenty of buyers for businesses

Looking to sell your business? Now’s the time, says a Colorado Springs broker who specializes in selling companies.

The value of businesses being sold are up 20 percent to 25 percent since the market tanked in 2009, largely because many victims of corporate downsizing want to buy their own business rather than try to find another corporate job, said Ron Brasch, a merger and acquisition specialist with First Business Brokers Ltd.

“It is really a sellers’ market for quality businesses with accurate financial statements because there are fewer sellers and plenty of buyers,” he said.

Brasch is a featured speaker at a free workshop on “The Art of Positioning Your Business for Sale” from 4:30-6:30 p.m. Thursday, March 1, in the Art Deco Lounge of the Fine Arts Center, 30 W. Dale St., that also will include a presentation by Rob Wrubel of Cascade Investment Group on “Wow, I Sold my Business! Now What?”

Sale prices for businesses have returned to historic norms after dropping sharply during the recession, when little or no financing was available to potential purchasers, Brasch said. Financing is more available, especially loans guaranteed by the U.S. Small Business Administration, and buyers are plentiful amid a tough job market that leads many to consider buying a business rather than continue to struggle to find work, he said.

Meanwhile, fewer businesses are on the market, Brasch said, since many members of the baby boom generation are holding onto businesses longer than anticipated as they continue to recover from the lean years of the recession. Many owners who considered selling their businesses are holding them off the market until the businesses recover and generate close to the same level of income they did before the recession, he said.

The potential value of any business depends on the level of cash flow it generates plus any salary the owner takes; the fair market value of its inventory, furniture, fixtures, equipment and any real estate; and the level of demand for businesses from potential buyers, Brasch said.

The seminar also will include recommendations on how business owners can boost the value and marketability of their businesses, including:

• Maintain proper financial and tax records that have at least been reviewed by accountant.

• Reduce the dependence of the business on a single or small group of customers or clients.
• Increase the curb appeal of the business location.

• Verify with written documentation all supplier and customer or client contracts as well as any patents or intellectual property and required permits or licenses.

• Prepare a written business plan if one doesn’t already exist.

• Create a second-level management team so the business isn’t solely dependent on the current owner.
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Contact Wayne Heilman: 636-0234 Twitter @wayneheilman
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