Business Brokers BC Blog

I live here in Vancouver and plan to cover a range of topics that are on people’s minds and as they relate to events, trends and also business opportunities. Comments and criticism, which are hopefully at least as interesting as anything I write, are welcome.

Owners of small and mid-sized companies thinking about selling their business are understandably concerned about current economic circumstances and the negative news heard daily. Some are putting their plans to retire or move on “on hold”. If sales and profitability are declining in their business, they fear this will impact negatively on the value of the business. Buyers, they feel, are also anxious what may happen to small businesses in the future and are therefore in the “driving seat” when it comes to negotiations.

However, other owners are still putting their businesses on the market and are receiving offers to purchase from qualified buyers at a fair price. Firstly, recent economic problems have not been so severe here in B.C. as in some other provinces and countries. Buyers are still out there and though values may have dropped it has really been those companies that were inflated to begin with, good businesses that were properly and realistically valued still have the same value today.

On a practical level there are always creative mechanisms that can be put in place to help facilitate a sale, like “earn out” options, whereby a buyer defers payments to the seller as revenues improve. Also, don’t forget, banks are still prepared to finance good business purchases based on historical cash flows.

This entry was posted on Friday, March 20th, 2009 at 10:41 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.