It does not matter if you have been in the business for twenty years or twenty minutes. At some point in time, changes need to be made and merging or selling might be the solution. It may not be the ideal time to sell your agency, but certainly there is still value in the business you have built.
Our firm estimates that up to 20% of travel and tour related business owners should be selling their business in the upcoming months. Just look at the statistics. Most industry companies are reporting that their gross profit is off approximately 30% from 2008 levels. Many owners are considering just turning in the keys to the landlord and shutting off the phones. Yes it is a buyers market, but walking away is not the answer.
If you have six months or less of cash or credit left to operate your business (this is where you need to be brutally honest with yourself) you need to list your business now! Closing your doors negatively affects your employees, independent contractors, clients and your family. Selling is better than closing your doors. Do not quit!
This great recession of 2009 is not a reflection on anyone’s ability to operate a business. Now more than ever you need to keep your head out of your heart and make rational unemotional business decisions. Believe it or not, transactions are still being completed in this environment. Sharing risk with a stronger entity beats fighting a losing uphill battle on your own. We have seen an uptick of business and expect more. If the economy and unemployment do not improve a lot by this fall, it will be too late for many owners to capitalize on their years of hard work.
We are aware of dozens of owners who should have sold in 2008 based on solid offers; but instead of thinking realistically, they thought emotionally. Without exception, they all wish they had cashed in on their asset when the offer was on the table. Remember this sage bit of advice–the risk of selling your business too early pales in comparison to the risk of selling your business too late. Ask Yahoo. They refused Microsoft’s offer of $45 Billion and Yahoo is now worth only $18 Billion.
In this environment, it is always prudent to keep your ear to the ground. While you may indeed be struggling, the addition of your business to another entity might just be what they need to make it—so you are valuable to them. Be honest with yourself and act appropriately. Know the value of your assets. You know how much money you have in the bank; why don’t you know the value of your business. Valuations will change constantly, but if you have a good idea (and you might be pleasantly surprised), you are far ahead of the game.
Innovative Travel Acquisitions, Inc. president Bob Sweeney and staff have completed 514 acquisitions of tour and travel related businesses since their inception in 1991. He is a proud member of ASTA,IBBA, NTA and many other known industry affiliations. Known as “the Matchmakers for the Travel and Tour Industry” they are available to answer any questions you may have by contacting them via phone 800-619-0185 or by sending an e-mail to firstname.lastname@example.org.