Greece: Potential Implication to Selling Your Business

If you’re like me, you’re tired of hearing about Greece and how this tiny part of the EU is upsetting equity and debt markets worldwide.  But if want to sell your business in 2015 or 2016, then you need to be alert to what’s happening beneath the headlines.

As I write this today, the equity and debt markets are the strongest and most available since early 2007.  Private equity and corporate cash is at record levels and we are seeing more interest in good deals than perhaps at any time in the last 10+ years.  Debt is plentiful, cheap and relatively easy to get.  Prices are at or near record levels for private companies.

Simply put … this may be the best time in at least 10 years to sell.

But that could change in an instant.  If we take a look under the covers of the financial markets and talk to the decision makers, people are getting nervous.   Nervous is bad … all equity and debt markets rely on confidence.  What we all experienced in 2008 was confidence being flushed down the drain.  If someone in Greece doesn’t have confidence in their bank, they withdraw their money.  Pretty simple.  If they don’t have confidence in the government, they move, or elect a new government, or protest.

At the end of the day CONFIDENCE is EVERYTHING.

We also learned in 2007-2008 that all markets, and all banking systems are intertwined.  Remember back when we woke up to a French bank potentially failing.  What happened?  Financial markets around the world came to a screeching halt.  When bankers lose confidence, they stop lending.  When private equity loses confident, they stop investing.

If you are thinking about selling your business in the next two years, I highly suggest going down two paths simultaneously.

Path #1 – Get ready for a sale.  We could write a book on this topic, but for this posting, make sure everything is in order … your earnings at meeting/beating projections…and if you can, ramp up growth going into a process.  We are actively looking for companies that want to position themselves for sale, so also call me.

Path #2 – Get ready to grow in a weakened economic environment.  The opportunity to sell your business at a price and with terms that  you want could go away in a day.   Therefore you need to have a well thought out back-up plan.  If you needed to hold on to your business for 4-5 more years, what would you do to maximize the price then rather than now.   Please don’t go down a path assuming that today’s conditions will be the same three or six months from now.  They might be … then again, maybe not.

Greece, Puerto Rico, China, etc. are all indicating that something under the surface isn’t right.  If you want to sell now, then get started immediately.  If not, then get ready by using both Path #1 and Path #2.  Call us if you wish to discuss.