Is now really the “perfect” time to sell a business?

Yesterday the Dow Jones Industrial Average flirted with 17,000 points.

Last month, GF Data reported “Middle Market multiples jump in Q1” as private equity buyers and their amnesic bankers jacked up offers on mid-market companies.

Knight Frank recently reported the cost of a London flat is up 7.5% over the same time last year; and similar trends can be seen in many real estate markets around the world.

Internet stocks are fetching multiples of their revenue again.

It seems everywhere you look, valuations are up. All this froth could lead a business owner to say that now is the perfect time to sell.

Maybe.

But most owners who sell will have to do something with the money, which usually means buying into an equally inflated asset class.

Let’s imagine you own a business throwing off $2 million of Earnings Before Interest Taxes Depreciation and Ammortization (EBITDA). Given how frothy the market is, you decide to sell when a Private Equity Group – pockets lined with cheap money from the bank –offers you 6 times earnings.

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Is now really the “perfect” time to sell a business?:

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.