Selling in an Economic Downturn

Murphy Business Transfer ReportThough the recent economic slowdown has produced a notable decline in acquisition activity, activity continues to remain well above historical norms, indicating that there are still many buyers looking for viable targets.

Contrary to conventional wisdom, selling a business during an economic downturn does not necessarily spell doom and gloom for the business owner. There are many instances in which challenging economic times actually benefit the business sale process.

During economically challenging times there are fewer quality businesses available for acquisition. This enhances the value of these companies because there are fewer competitive deals. “The cream rises to the top” A solid business opportunity should find a suitable acquirer and deal structure irrespective of the general economic climate

In tough times companies find it harder to expand through traditional sales and marketing channels. Many firms seeking growth pursue targeted acquisitions to achieve their growth objectives

There are record numbers of former corporate executives seeking to purchase privately held companies, as a direct result of corporate downsizing. Armed with strong finances and operational experience, these buyers are looking for solid middle market opportunities wherein they can control their own destiny
The ability to rollover 401 K’s and other retirement funds to purchase a business has made it easier for people who may not have the liquid assets needed to acquire a business A recession may affect some companies more than others.   A decline in sales and profits does not always result in a catastrophic affect.

The real question is not “have sales declined” but “how has this business performed in comparison to others”. Are sales down by less than the general market? Is the business positioned to grow rapidly when the economy rebounds?

Issues in an owner’s personal life should be the driving reasons behind a sale. Keep in mind that holding on to your business may also pose a risk, as the future is unpredictable and there is never a guarantee that bad times will not get worse.

If you have a topic you would like to know more about, or know anyone who you think would benefit from this kind of information, please email me

Dan Carelli
Certified Business Intermediary
321 544-9595

Murphy Business & Financial – Florida’s Largest Business Brokerage

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