The Best Time to Sell a Business Could be Right Now!

The Dow Jones closed at an all-time high on Friday, September 19, 2014. And the NASDAQ and S&P were within ¼ of 1% of their all-time highs. As a result, corporations, private equity groups, and individual investors are flush with cash – trillions of dollars.

Where can they go with all that cash? Interest rates are so low that fixed income investments are not attractive. Whereas it’s typical to have a stock market correction (10% tumble) about once every 1 1/2 years, it’s been almost 3 years since the last correction. With international tensions in Ukraine, Russia, Iran and the Islamic radical group ISIS setting its sights on terrorizing the US economy, how much longer can the (stock market) good times last? Where can that cash best be used to achieve adequate returns on investment? The answer – business acquisitions.

The buyer demand for good businesses with good cash flow has always exceeded the supply of good businesses available for acquisition. However, with buyers having more cash than ever, the numbers of interested buyers can only increase. In addition, interest rates are extremely low, enabling buyers to finance their acquisitions at reasonable rates. However, the low interest rate window cannot remain open forever. The Federal Reserve policies will certainly result in an increase in interest rates over the next year or two. When that happens, buyer’s will experience an increase in debt service requirements which will ultimately result in reduced business sale prices for business owners.

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For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.