The Right Time to Sell My Business?
When is the right time to sell my business. Timing is Everything. As a business owner this is a question I faced and as a business broker I realize many business owners have this same very important decision.
The answer on the right timing is different for most all business owners. Furthermore the answer may lie more in the question(s).
Do I want to sell my business…. or do I want to transition it to family or just close the doors or other?
Do I sell it when the business is not doing well?
Do I sell it when the business is doing well?
Do I sell my business when the economy is down? Economy is doing better is now the time?
How do I even begin looking at the process and time involved to sell my business?
Health. life, age, family, money, are all factors that go into this very important decision. A business sale does not occur within a vacuum .
What is going on in my business , in my industry, in our current economy, in our economy going forward all affect value.
What effect does the aging Baby Boomer population have. Estimates I see are we have approx. 75 Million Baby Boomers in the US which is almost 25% of our population (born between 1946 and 1964 so current age group of 54-70). Many of those will exit business over the next several years.
Will there be a “glut of available businesses for sale? Will this drive down the prices?
I don’t know but do believe it could affect values.
While running my business I had interested unsolicited parties come forward with an interest in acquiring my business, discussion were had and we even got to the points of an LOI (Letter of Intent) and Purchase offer being presented. The offers were reasonable but I was “not ready”. When consulting with my CPA, his advice to me is “You will know when you are ready”. I continued to run my business for another 10 years and hit a point when “I was ready”.
Selling ones business involves a lot of moving parts. I do believe it is prudent to sell your business under your terms, not based on terms dictated to you. (health, divorce, legal matters or other negative event forcing a sale)
As a business owner we deal with risk. We do our best to mitigate risk but the risk of owning a business is carried with us until we know longer own that business. Mitigating the risk of having to sell your business under terms not dictated by you should be a priority. So if you are “not ready” Is it time to start getting ready ?
- Gain knowledge about the process
- Have a realistic view about the “salability” of your business.
- Know that selling a business when that business is doing well is significantly more doable than a business in a lesser state.
- Know that not all businesses that try to sell DO NOT and or maybe sell for a fraction of perceived value.
- Have a plan
A lot go into the decision of the “Right Time” to sell a business. And part of my job as a business broker is sharing my experiences with the process. But being ready psychologically, emotionally, financially is a timing question that only you can answer. “Are you Ready ?” or are you “Ready to start getting Ready”.
Scott M Messinger is a Business Broker working with Business Sellers and Buyers focused in South Carolina Florida and Southeast USA. For more information go to SellaBusinessAdvisors.com