If you've been holding off on selling your small business until the right market conditions are in place, 2014 might be the year you've been waiting for. In its most recent Insight Report, website BizBuySell reported that sales of small businesses were up 49% in 2013 over the 2012 numbers, an upswing that is expected to continue this year. "Private equity spending power has topped $1 trillion, a buyout bubble is possibly on the horizon, and competition is driving valuation and demand," said Peter Lehrman of entrepreneur.com. "In the entrepreneurial ecosystem, business owners looking for an exit strategy are likely to find 2014 an optimal time for selling."

Why 2014 Has The Advantage

Recent rises in the stock market may not have affected the values of smaller businesses, but they did benefit larger ones, making them more likely to consider acquiring other companies. Instead of cash, corporations tend to purchase businesses with stocks; thus, higher stock prices cost the company a smaller percentage of ownership. A rise in interest rates has been predicted for the last few years, but it looks like it will actually happen in 2014. As these rates go up, so does the price of capital, which will lead to lower valuations. A lot of buyers will be using loans to make acquisitions; the more it costs buyers to get access to capital, the less likely it is they will pay the premium value. Trying to sell before rates increase will give you a better chance of actually completing that sale. The last few years of post-recession economic recovery will also work to a seller's advantage. Many buyers build their projection models from the last few years of business operation. As the economy was in an upswing at that time, this window

Getting Things In Order

Making your business an attractive proposition to potential buyers is crucial. Getting your books in order will go a long way toward ensuring serious interest; one way to boost buyer confidence is to obtain CPA prepared financial statements for the last few years. While doing so may be an added cost, when considered as an investment toward selling, it's an expenditure that makes sense. Protecting your intellectual property ahead of a sale will help assuage concerns a buyer may have. This protection can range from applying for patents to securing trademarks on your company name and other associated materials. Verifying that your business can operate without your presence will also come into play. "Generally, if your business relies less on an owner, you get a higher selling price," said Jock Purtle, an internet business broker with Digital Exits. Finally, know how much your business is worth. Commission valuations from several firms you trust to get the best idea of what figure you can present to interested parties. 2014 could be the year for selling your business for the greatest benefit. Feel free to get in touch with us for more information on how to best use the above information to your company's advantage.