Now is the time to strengthen your business, whether you intend to grow it or sell it

SCOTT ERICKSON

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Leonard, Street and Deinard

www.leonard.com

Topic: Legal

There are a number of options from which to choose, including growing your business further through a strategic alliance or acquisition or selling your business.

Growing the business further

In the new economy, strategic alliances enable a business to gain competitive advantage through access to a partner's resources, including markets, technologies, capital and people. Many businesses are willing to consider doing things that they would not have done before. Creativity and good ideas will produce opportunities for success. The key is you need to be willing to invest now in time, resources and first-rate people to position your business to be strong for the future.

Now may also be a good time to look at acquisitions. A number of businesses may not be doing as well as your business. You may be able to purchase a business or line of assets at a discounted rate, allowing you to create a new line, geographic location or opportunity for your business that will boost productivity and the bottom line. 

Selling the business

If you have been growing your business and making it more profitable, most likely you also have been putting your business on the radar screen of other companies, some of which might want to acquire you. 

The decision to sell is a difficult one and is driven by a number of factors, including lifestyle and financial considerations. Once you address the lifestyle issues-whether that's retirement, burnout, health concerns, family matters or a mix of those issues-it's time to look at the financial side.

Currently, there are many potential buyers, but few strong businesses available for purchase. A strong business today may generate a purchase price multiple that may make a sale attractive.

No matter what you decide, this is indeed the time to carefully consider your move. Those businesses doing well are doing so because they are doing things better and different from their competition. History tells us that what almost always follows an economic downturn is an upturn that lasts for a significant period of time. Once the economy improves it is likely that we will experience good strong economic growth for some time into the future. Plan now to be in a position to grow and improve your business for the future. 

This is a time to be bold and create opportunities.

Scott Erickson is a shareholder at the law firm of Leonard, Street and Deinard. His practice covers multiple areas, including corporate and business planning, business acquisitions and sales, shareholder and owner planning, and tax, estate and succession planning.