Is It Time to Sell Your New York or New Jersey Business?

Is It Time to Sell Your New York or New Jersey Business?

For business sellers who have been waiting until the economy turns around, it may finally be time to pull the trigger. With profits up and the economy improving, both banks and buyers are coming back to the market.

According to BizBuySell.com, 1,685 small businesses changed hands between July and September, compared to 1,189 during the same period in 2012. The online small-business marketplace further reports that the most recent uptick in small business sales represents the third year-over-year quarterly increase in a row.

BizEquity.com confirms the upward trend. The online valuation provider for small businesses reports that the median valuation for businesses using the site increased to $1.3 million in the third quarter, up from $860,000 during the same period in 2012.

In other good news, the Small Business Association (SBA) backed 7(a) loans totaling $5.3 billion in the third quarter, compared to $4.3 billion during the same time frame in 2012. The SBA loans can be used to acquire, launch or expand a business.

Of course, the upward trend may not have the same impact on all New Jersey and New York businesses. The service, retail, and restaurant industries are seeing the strongest growth. Factors that may influence the specific value of your company include:

• Location
• Longevity
• Customer base
• Competition
• Industry trends
• Cash flow and net profits

If you are not yet ready to walk away from your business, you should still have an exit strategy in place and a fairly good idea of how much your company is worth. Having a business valuation and exit plan in place helps ensure that you will be prepared to act when the time is right.

Source: Wall Street Journal

If you are contemplating the sale of your New York or New Jersey business and would like to discuss the legal issues involved, please contact me, Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.