When is the Right Time to Sell Your Business?
As the saying in life goes, “Timing is everything.” And when it comes to selling a business, timing can be the difference between a massive success…or a massive disappointment.
When it comes to selling a business the timing components are market, business, and personal.
Ideally, your business is in a growing industry, with ample opportunity for small businesses to thrive, little regulatory issues, clean financials, a quality management team, clean operations, and you are personally ready to sell your business and dedicate the time to a thorough sale process.
Here are some questions to ask yourself about the timing of selling your business.
Market Timing
Is your industry growing…or shrinking?
Is market regulation increasing…or decreasing?
Is market pricing for your products increasing…or compressing?
Is your market facing pressure from cheaper, overseas competitors?
Is your market being automated by technology…making it less relevant?
Is your market enjoying good press…or damaging scrutiny?
Is there ample M&A demand for your market…or none?
Are market valuations up, sideways…or down?
Are large competitors monopolizing the market…or are there many providers?
Business Timing
Is your business growing revenues and profits…or declining?
Do you have a strong management team in place…or are you the only manager?
How easy is it for you to recruit talented employees?
Do you have clean financial operations and reporting…or not?
Is your business clear of tax and compliance problems…or do you have IRS issues?
Personal Timing
Are you ready to leave your business with another buyer…for good?
Have your CPAs and Attorneys developed a tax & asset protection plan?
Are you prepared to spend hours working with buyers during the sale process?
Are you emotionally ready to sell your business to a buyer?
Summary
In summary, there are some elements timing that you can control, and many that you cannot. In any case, a quality business asset with smooth operations, competitive advantages, and good people working for it will put that business leaps and bounds ahead of the competition, and be positioned for a successful sale.