Seattle Business Brokers in Washington State Recommend Selling Your Software Company or Technology Business in 2018
Are you a Seattle-based technology business owner looking for a highly experienced Seattle business brokers in Washington state? Maybe you are nearing retirement, feel burned out or are ready to pursue a new opportunity. Whatever your reasons may be for wanting to sell the technology business, you are in luck.
Largely due to the movement of tech giants into Seattle, rents have increased, commercial office space is at a premium, and business owners are getting good prices for their companies. According to top Seattle business brokers, these are all reasons why you should consider selling your tech company now.
Read on to learn more about these trends and why this is a great time to sell your software business.
Rent Keeps Going Up
Rents are high in Seattle now, and they will not be going down anytime soon. This is good news for anyone looking to sell their technology business, as you will likely able to command higher prices when it comes time to sell your software company.
Compared to other major cities, Seattle was once known as a relatively cheap place to rent office space. Now, this is rapidly changing, largely due to the trend of tech giants like Facebook and Amazon moving into the area. Seattle is now one of the most expensive places to rent an office in the United States. Over the past three years, the cost of office space increased 31%, making Seattle more expensive than Chicago and Los Angeles.
Despite the increasing cost of rent, Seattle business brokers say that big companies are flocking to the city. In the past few years, companies such as Expedia, Weyerhaeuser and F5 have all relocated to Seattle. Other major companies like Facebook, Google, and Uber have also expanded into Seattle in recent years.
With such influential companies eager to expand into Seattle, this is an ideal time to consider selling your technology company. Given the high cost of rent in the city, if you sell now you will be able to command higher prices for office space.
Commercial Vacancies are in Short Supply
Seattle is currently facing a shortage of commercial rentals, which works in your favor if you are looking to sell your software company. With so many hugely influential companies moving into Seattle, commercial vacancies are getting harder to find and are more expensive.
The commercial vacancy rate, which was estimated to be 20% during the recession, is now down to 5.8%. This means that Seattle has fewer empty office spaces than New York City or Los Angeles. And as the desire for Seattle office space continues to increase, construction companies have been unable to keep up with the demand.
Take a moment to consider this: Seattle has built 8.8 million square feet of office space since 2008. Amazon alone claimed 8.1 million square feet of the new construction. This has made it very difficult for other tech companies to find office space.
The shortage of office space can be a major advantage for business owners looking to sell their tech companies. Given that so many companies are eager to expand into Seattle, the prospect of purchasing a tech company with an established office space is very desirable.
Business Owners Get Good Prices
Need another reason why the best time to sell your software company is now? Think about this: small to mid-size Seattle business owners looking to sell are getting very good prices for their companies.
According to a survey study done by researchers at Pepperdine University’s Graziadio School of Business, small business owners who sold their companies managed to sell for 3% more than their original asking price. In fact, small, greater than $500,000 asking price, and mid-sized businesses got 99% of their asking price, up from 90% the previous year.
In order to obtain higher selling prices, many Seattle business brokers in Washington State recommend preparing your company before selling it. This process involves reviewing and adjusting add backs to your finances.
However, the majority of companies that sold for under $500,000 did so without advance planning. The same goes for half of companies that sold between $500,000 and $2 million. Don’t be discouraged if you haven’t done advanced planning for your company. You will likely still be able to sell for a good price.
For business owners, the desirability of Seattle as a location, the scarcity of commercial office space and the high rents all translate to good selling prices. If you are getting ready to retire, are feeling burned out or want to leave the business for another reason, there’s really no better time to sell than now.
Want to learn more about selling your technology business? If you are ready to talk to a Seattle business broker in Washington state about how to successfully sell your company, please fill out iMerge’s confidential contact form. One of our Seattle Washington Business Brokers will follow up with you shortly.