When is the Right Time to Sell Your Company?
When is the best time to sell my business? For most CEO’s or business owners, this can be one of the toughest decisions in their businesses lifecycle that they will have to make. Often the decision to sell is driven by change, whether that’s a change in lifestyle, from moving or retiring or a change in external market factors, to asking yourself which do I have more of at this time? Passion or Exhaustion. Forecasting these changes, planning for your companies future and preparing your business in advance can make a huge difference to your sale price. But how do you decide when is the right time to sell?
Will someone buy us?
You can’t sell if no one wants to buy you. This doesn’t mean no one does, but there is a process of attracting interested buyers without jeopardising your reputation to your competition. Business deals happen daily whether that’s mergers or complete takeovers, if you think you might want to sell set up an informational meeting with your accountant and or a business mentor to get ‘all your ducks in a row so to speak. From there you will have an accurate idea of the value of your business so if there is an interested buyer, you can explore the matter further with a succinct negotiation. If the deal makes sense for you and your company, selling can become an obvious choice.
Sell when your business is a success
But why would I want to sell if my business is doing good? We hear you, it does sound counterproductive but buyers want a business that is growing, not one that is stagnant, struggling or seeing a decline. Financial buyers purchase your company’s future stream of profits, so if there are not current profits flowing expect to lower your negotiation price. If your business is well established and see’s consistent yearly growth, you will be in a much better position to sell.
What other options are there from selling?
What will you do if you do not sell your company? Will you keep it? Shut it down? Consider again, asking yourself which do I have more of at this time? Passion or Exhaustion. There is no doubt entrepreneurs and business owners of any size are lacking passion. Small business owners tend to invest a lot of emotion, time and effort into building their business which can also lead to business burnout and making the difficult decision to sell because they themselves are struggling to keep up with their own creation. Consider instead finding another CEO to replace you, or a general manager to run the day-today? an A+ management team can go a long way to reduce burnout as an investment into not only your success but the success of your company.
Want to hear more? Our team specialises in Estate, Succession and Wealth Management. When your business has come full circle and it’s time to move on, what do you do next? Where do you go from here? Talk to one of our expert accountants today.