Sell Because of a Predicted Recession? Don’t Fall for It.

“A recession is coming, probably 18 to 24 months from now. If you’re thinking about selling your business, you better do it now.”

Every business owner in America has heard this dire warning. Have you ever noticed? The “forecast” for a coming recession is always 18 to 24 months away!  You heard this 18- to 24-month forecast in 2011, 2014, 2016 and you’re hearing it now at the end of 2018. “Sell your business now to avoid a recession” is the dumbest yet oldest trick sloppy business brokers use to scare owners into selling their business.

There are two problems with this fear-based motivation technique, beyond the reality that nobody knows how (much less when) to project a major shift in the economy. First, a good business can be sold in any economic environment. In fact, an argument can be made that a good business can be sold for more during a recession because it will stand out  like a rose amongst the thorns. The second reason it’s dumb to use fear of a coming recession as motivation to sell a business is that the buyer might have the same fear. If a recession is indeed on the horizon, do you think you can trick a buyer into not seeing it? Business owners and prospective buyers see the same economic forecasts. So if the macro-environment is trending negative, it’s naive to think you can slip under the wire just before a recession hits and sell your business for top dollar to an unsuspecting buyer.

Here’s my point…a business owner needs to be proactive about the timing to sell their business based on the strength of the business. You take a cake out of the oven when it’s done, right?  If you know what makes your business irresistible to buyers (buy my book), then you can sell your business for a premium ….. in any economic environment.

JIM CUMBEE is President of Tennessee Valley Group, Inc. a retainer-based business brokerage and transition mediation firm in Franklin, TN. Cumbee is an attorney and has an MBA from Harvard Business School. Jim is the author of Home Run, A Pro’s Guide to Selling a Business.  He has a wide range of corporate and entrepreneurial experiences that make him one of the most sought-after business transition advisors in the state of Tennessee. 

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Tennessee Valley Group

Jim is an attorney (non-resident status with the Missouri Bar) and though he no longer practices law, he has read and negotiated enough legal documents to fill a cargo tanker. He has an MBA from Harvard Business School and knows how Wall Street and private equity operates. Jim is a Tennessee Supreme Court Rule 31 listed general civil mediator with tons of experience helping business owners (large and small) work through sensitive problems to achieve winning results. He is the author of "Home Run, A Pro's Guide to Selling Your Business, Seven Principles to Make Your Company Irresistible."

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