This is the second blog in my series about Selling your Business. The first blog in the series (back in April) looked at how to determine business worth. If you didn’t read that blog you can catch up here
This month we’ll be looking at when to sell your business. There is no specific right time to sell a business. However yhere are several factors you can consider that will help you determine when is the right time to sell your business…
From a fiscal point of view the best time to sell your business is when it is at its optimum value, this could be for several reasons including;
Financial Stability
If your business has experienced strong growth, has a solid track record and delivers consistent profits then it is an excellent time to sell. Your business will be an attractive proposition and is likely to command a higher price.
Growth Potential
Buyers will often look for businesses with growth potential. So, if you have streamlined your business processes, optimised your marketing and got a great team in place, then that could be an excellent time to sell.
Market Conditions
If your sector is experiencing high demand and the economic climate is good, then the time is right to sell. Conversely if your industry is struggling and company valuations are not what you would want them to be, it might be better wait and look at other options, such as diversification.
There are also several more personal reasons that a business owner might consider it the right time to sell, including;
Personal Circumstances
If you would like to retire, have health issues or even if you just want to pursue other interests; business or personal, then the time may be right to sell your business. If the time is right for you, then take some time to make sure everything is in order in your business which will ensure it commands a good price.
Succession Planning
If you don’t have suitable successors in place then it might be preferable to sell the business. It could be that you were hoping a family member would step up and take over the business, but they have shown no interest. Or perhaps you had an employee or partner in mind, but they have not shown the aptitude, either way a sale to a motivated buyer could be the best future for your business.
Emotional Situation
Running a business can be stressful and just because you started it, doesn’t mean you have to go on forever. If you are experiencing burnout, don’t find the business enjoyable anymore or just want to change things up – it could be time to sell.
Selling a business needs careful consideration, not just the decision of whether or not to sell, but also the timing, the valuation and of course the process of the sale itself. There are many factors that can affect every part of your decision and actions.
I would always suggest that you seek advice from experienced professionals. If you are considering selling your business soon or in the future you can book a complimentary 121 with me here
