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New Rules for Selling Your Spa

By: William J. Lynott
Posted: October 26, 2010, from the November 2010 issue of Skin Inc. magazine.

After a decade that saw business-sellers flourishing, the economic meltdown of 2008 ushered in a precipitous drop in business sales, mergers and acquisitions.

In fact, 2008 was the worst year in recent times, according to Bryan Adams of FactSet Research Systems Inc, New York. “Clearly, the second half of 2008 stands out as the bottom, when the market essentially collapsed. Now, although the market is still finding its footing, it does appear that it is moving in a positive direction,” he explains.

Although many veteran business brokers suggest that the worst may be in the past, not everyone agrees. Business broker Herman Petrecca of Business Connection Plus in Warminster, Pennsylvania, specializes in small-business sales and says that he is continuing to make sales, but many of them are buy-and-flips. “There are buyers out there, but many are looking to buy at distressed prices so that they can turn around and re-sell the businesses,” he explains.

Bernie Siegel of Siegel FinancialGroup in Conshohocken, Pennsylvania, takes a different view. “The small-business market has bottomed out, and the worst is behind us,” he says. “The poor economy of the past couple of years has resulted in many potential business-sellers holding off, and the result is a pent up supply of potential buyers.”

Adams agrees, “I believe that an owner putting a business up for sale now will find that there are buyers out there. There are deals to be done and willing buyers, so if you have a profitable, well-run and positive-cash flow business, you should be able to find a suitable partner and get some good value for yourself.” According to Siegal, “Owners should choose to sell a business when it makes personal sense to them. Owners do not usually sell companies driven solely by financial goals, but rather when it’s time to retire, move on, move up or whatever.”