Is 2020 the Right Time to Sell your Business?

Is 2020 the Right Time to Sell your Business?

Houston has been seeing increasing economic growth throughout 2019 with projections of continued growth into 2020. With this strong economy, small businesses have been thriving - making it a great time to sell your Houston business. Without a doubt, your specific industry is going to affect how well your business will sell but the strong market in Houston makes 2020 a strong year to consider listing your business for sale.

Small Businesses in Houston, Texas

Houston’s diverse economy has made Houston resistant to recessionary pressure. With  99% of businesses in Houston considered “small,” Houston ranks as one of the smallest business-friendly cities in the United States. This means if your considering selling now is a great time to sell your Houston business.

Small business owners remain confident in continued revenue growth which can, in turn, make their business be valued at higher numbers. In fact, two-thirds of small business owners believe the local economy will continue to improve. This is positive news, as investors like to buy businesses that are doing well.

It’s Time to Sell

Although the Q4 numbers are not all in yet, we are able to look at and analyze the information we do have. For instance, the financials of business transactions during Q2 2019, were exceedingly healthy. The median revenue and median cash flow of a sold business both jumped, 14.3% and 8.3% respectively. The median revenue in Q2 was $601,380 and the median cash flow was $130,000 (ending a YOY decline). This information, in conjunction with Transworld’s business listings being superbly healthy – trading at values 2-3 times their seller's discretionary earnings, reaffirms that there is no better time to sell.

A large number of business owners listing to begin their retirement implies the wave of baby boomers is nearing full swing. This is important to note because based on our experience over the years, the number of owners listing to retire has grown 10% year over year. We have seen a variety of sales in popular industries such as education, cleaning, healthcare-related industries as well as construction. There are countless opportunities for a variety of buyers in the market right now.

When in doubt, contact your local experts at Transworld Business Advisors Houston. A local business broker who is experienced in the Houston market will be able to help you value your business and determine if your industry’s market is showing enough of a growth trend making it the optimal time to sell your business. If so, it might be an ideal time to jump in on selling your business in 2020.