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There are buyers for your business - even in times of crisis

External factors can mean stagnation in your business. But that doesn't necessarily mean you should shelve any thoughts you may have about Sale of the companyIn fact, there are good reasons to continue plans for ownership transfer considerations and generational succession a view to selling the business, even in years when the growth curve does not look as expected.

This is according to business broker Ole Jensen, partner at Business Broker:

"We continue to see a healthy interest in growth through acquisitions despite the current global turbulence. In other words, there are still long-term and well-capitalized buyers in the market."

Opportunity to sell your business at the right price

In his ongoing dialog with owners and directors who are considering selling their business, Ole Jensen is experiencing a certain reluctance at the moment. Some business owners believe it makes the most sense to focus on short-term operations and put any consideration of a change of ownership on hold due to uncertainty about earnings.

Ole Jensen understands this reaction, but he says that the reality is more uplifting than the cautious business owners imagine:

"If the company has performed well in previous years, there's no need to worry that you can't sell the company at a fair price. Buyers look at the company as a whole. Therefore, a single year with understandably deviating figures is not decisive."

The point is clear - even though the financial statements may not show the growth that was expected when the budget was drawn up, it doesn't mean you should park the idea of a future sale.

Consider earn-out ownership transfers

Based on Business Brokers portfolio of sold companies, Ole Jensen highlights another good argument for continuing to plan for a change of ownership in the company:

"It can take three to four years from your first thought of a sale until the last money for the shares is in your holding company's bank account," says the business broker and elaborates:

"The ideal sale typically takes 9–12 months to complete. Some of the solution models we use in a change of ownership include earn-out and an agreement that the current owners will remain associated with the company for a period after the change of ownership."

This means that the period from initial consideration until the seller is completely out of their work commitments can stretch over several years, which often harmonizes with the seller's personal plan for a gradual exit.

Seen in this light, lower than expected activity in the company is not fundamental to the purchase price or transaction model, says Ole Jensen.

The business broker's 3 tips for generational succession

For business owners who were considering selling their business before the slowdown, this is the message from Ole Jensen:

"Stay on track and qualify your considerations by contacting a business broker for a no-obligation discussion on how best to remain attractive to potential buyers when a change of ownership takes place."

Ole Jensen highlights three topics that an informal meeting with advisors from Business Broker be the first step in clarifying:

1: Where is your business today - how can you make it more attractive?

This could be a discussion about the role of key people and the possibility of reducing cash tied up in the company's working capital - for example, stocks and accounts receivable. Depending on the industry, it may be relevant to ramp up e-commerce and digitalization as part of sales maturity.

2: What ownership structure do you want in the future - and what is optimal?

Perhaps there are relevant owner candidates within the company who could purchase some of the shares. Or perhaps a partial sale to, for example, an investment company would be a good solution for generational succession.