B E N C H M A R K I N T E R N AT I O N A L
THE BENEFITS OF SELLING FROM A STRONG POSITION
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T H E BENEF ITS OF SELLI NG F ROM A S T RONG P OS I T ION Companies that sell when business is good will always receive higher valuations, as they are selling from a position of strength rather than a position of weakness.
Whilst many business owners find it difficult to comprehend selling up during good times, when looking at the numbers, it is the best strategy for achieving the best possible price. Selling when the company is strong increases the value of the business, as potential buyers always look for companies that are thriving with strong potential for future growth. On the other hand, selling when the company has hit hard times will yield a lower valuation – and the buyer will have the upper hand in the negotiations.
Yahoo was an internet company that reached a valuation of around $125 billion in 2000. In 2008, Microsoft offered the company $44.6 billion, which was rejected by Yahoo. In 2017, Yahoo was sold to Verizon for a total of $4.48 billion – a drop of $44 billion in just nine years.
IN 2017, YAHOO WAS SOLD TO VERIZON FO R A TOTA L O F $4.48 BILLION – A DROP OF $44 BILLION IN JUST NINE YEARS.
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CASE STUDY: YAHOO
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For further information about buying and selling businesses, visit the Benchmark International blog.