It's fun to own a business when times are good. You're selling in-demand products and services, gaining appreciative clients, creating new jobs, growing revenue, the bank is patting you on the back, you're receiving awards and accolades, the economy is growing, and you are making more money than you ever dreamed  possible. That makes it a perfect time to sell!

Many business owners make the mistake of putting off selling for a few more years. Perhaps you know you want to exit within about five years but think "with things going so well, I'll wait a little longer before attempting to sell." But what if something unexpected happens? What if you lose two of your key clients? You lose a key staff member? A group of former disgruntled employees sues the company? A key supplier dramatically increases prices? The economy goes into recession? New regulations are imposed that are incompatible with your business model? Such changes could make your business entirely unmarketable in the short-term, negatively impact value, and may require waiting far longer to sell in order to correct the problems and develop enough of a track record afterwards that it won't have a significant impact on business value and marketability. Your plan of selling within 5 years? That may now be 10 years.

However, there's another reason that waiting to sell may not be such a good idea: we're in a seller's market, but it's not likely going to last. There are estimates of $1-2 Trillion of investment capital (between private equity groups and corporations) currently sitting on the sidelines looking to be placed in acquisitions. Given the low yield on US Treasuries (which set the minimum benchmark return as a very safe investment) the correlated return expected on equity investments is also low, and the cost of acquisition debt capital is low. The result of the massive amounts of investment capital and low interest rate environment has been higher prices being paid to sellers of successful businesses. Who knows how long it will be before interest rates start increasing, but there's certainly not much room for them to go any lower. 

Right now the US Census Bureau indicates that over 70% of businesses that employ at least one person are owned by people over 53 years of age. Do you think some of those baby boomers are going to want to retire in the not too distant future?  What's going to happen if you wait to sell when the bulk of other small and medium size business owners also decide to sell? I think you know where I'm going with this: it is likely that within a few short year the "seller's market" is going to become a "buyer's market", which will likely result in lower valuations and may even render some businesses unmarketable. Perhaps a business owner who today could sell for 7x earnings will only be able to achieve a price of 4-5x earnings in the buyer's market. 

Following is a link to an article that describes the upcoming demographic shift in the business sale market: There's a Perfect Storm Approaching for Exiting Business Owners

Economist Milton Friedman provides a compelling rationale for the benefits of free enterprise directing resources versus political control over the means of production in this fun exchange with a very youthful Phil Donahue.

Ever wonder how small business owners collectively view political issues?  You might be interested in reading the National Small Business Association's report "The Politics of Small Business".  If you know many small business owners then many of the results may not surprise you.  For example, small business owners are independent, critical thinkers with only less than 18% voting a straight party ticket.

Some of the other results include:  

• Only 14% of respondents considered themselves to be moderate to strong liberals on fiscal issues / the economy.

• I know many people believe that increasing access to capital or improving lending are top political priorities of small business owners, but this survey shows that this is not at the top of business owners' concerns.  Survey respondents believe the top three things the federal government can do to help their business are:  1, reduce and reform taxes; 2, get out of the way; and 3, reduce and reform regulation.

• More than two-thirds believe policymakers inside the beltway have little to no understanding of small-business issues.

How would you like to see city, state, and local government help small businesses?

How important is economic freedom?  Are less free and more regulated people, as a whole, just as well off as those with more economic freedom?  Are all types of economic organization equally good but with different pros and cons?  Or does economic freedom truly lead to a higher quality life?  Which countries' people have the lowest quality of life and what is their level of economic freedom?  Do property rights really matter?  Is a smaller or larger role for government better?

Check out the following 60-second video that provides a perspective on this topic.  What do you think?

Today the Wall Street Journal reported that 2014 has seen one of the highest levels of large company Merger & Acquisition activity in many years.  See:  Deal Boom Feeds on Surging Stocks

Then later today I saw a video interview with the CEO of Axial Market, a website that serves professional deal makers that mostly serves mid-market companies (I know people have different definitions of "mid-market" but I consider that to be about $20 million - $500 million in annual revenue),  In the video the CEO of Axial indicates that they, too, have seen record levels of deal activity (see video below).

Codiligent primarily sells small companies with less than $20 million in annual revenue, but we, too, have seen a high level of activity this year (and anecdotally have heard the same from others that serve small companies).  If you are thinking about selling your business, now would be a good time to consider moving forward.  Don't wait until the market softens and miss the opportunity to maximize your exit.  

Often when we think about the term "entrepreneurship" we think of the glamorous stories of people who have rapidly grown small start-ups into billion dollar companies:  the Facebooks, Nikes, and Spanx of the world.  Because of these high-visibility success stories many people assume that entrepreneurship is on the rise in our country.  Unfortunately, they are wrong.  Entrepreneurship in the US has been in steady decline for the past 4-5 decades. 

Yet, as a society we all benefit from the life-changing innovations and products that entrepreneurs create, not to mention the jobs and tax revenue.  So what can we do to encourage entrepreneurship?  In the following video Cameron Herold suggests how and why we should raise kids to be entrepreneurs. 

In the interest of full disclosure, I am a stockholder in Google.  Having said that, I appreciate how much Google has done to democratize business, making it easier for start-ups and small businesses to compete with large multinationals through its ability to connect people to resources and customers via search but also by providing a way for small businesses to cost effectively reach highly targeted buyers whether those buyers are in a small geographic area or on the other side of the globe.  I recognize that some people worry that Google is too ubiquitous and controls too much information - I don't share those concerns - I believe Google has been an incredible force for good in the world.   

As a business broker, I often do research to locate and screen logical strategic buyers for businesses I am selling. It's hard to believe that not that many years ago, a business broker or investment banker would have likely put in 10-20 times as much time and effort to assemble a similar quality list of logical strategic buyers.  While there are a variety of research tools I use, Google plays a large part in this research.  

Beyond the obvious ways that Google helps entrepreneurs, what you may not realize is that Google takes a  hands-on approach to helping foster global entrepreneurship.  Check out the video below to see some of the ways that Google is encouraging and enabling entrepreneurship.

Bill Gates, one of the most financially successful business people in the history of the world, is also one of the most philanthropic.   In fact, the Bill & Melinda Gates Foundation is the largest transparently operated charitable foundation in the world and the couple plan on eventually donating 95% of their wealth to charity.  So how does someone who is one of the most financially successful people in the world, but also one of the most generous, view capitalism?  See the video below.

In the following video, economist Milton Friedman dispels the following myths:

1. Government can provide services at no one's expense.
2. Businesses can pay higher taxes at no significant impact to business owners, employees, and consumers.
3. The government printing more money is devoid of a negative impact on the economy.