2021 – A “Perfect Storm” For Selling Your Business
Have you been toying with the idea of selling your business in the near future?
If so, you’re not alone. Record numbers of your fellow business owners are giving this idea serious consideration, especially after dealing with a turbulent and uncertain 2020. The good news for those considering selling is 2021 is shaping up to be a once in a generation opportunity to sell a business for top dollar and under highly favorable term.
This is a result of the following elements coming together to create a proverbial “perfect storm”:
It’s a Seller’s Market right now. There are simply too few quality businesses for sale to meet buyer demand.
Business that sold in the 2nd half of 2020 were valued at higher multiples than at any other time in recent memory.
Interest rates remain at historically low levels, fueling increased buying activity.
There is now optimism in the market that the worst of COVID’s impact on our economy and our country appear to be finally behind us. The positive momentum this created at the end of 2020 is carrying over in a big way into 2021.
It’s hard to imagine that only 6 months ago, much of our economy was in a lockdown. Even the best of businesses weren’t selling as buyers and banks took a “wait and see” approach.
Taking all of these elements into account, I trust you can appreciate why I feel so strongly that 2021 will be a “perfect storm” for selling a business. Of course, all situations are unique and the desirability of your business in eyes of a buyer is partially dependent on how COVID impacted your business in 2020. The good news is that even if this impact was a negative one, as long as your business is back on track, meeting pre-COVID performance levels, the value of your business may not have been negatively impacted.
Capital gains taxes will also be increasing under President Biden. If you have considered selling your business, we can help you decide if it is the right time.
Sunbelt Minneapolis Team