In so many areas of life, success happens when you take the right action at the right time. That’s certainly no less true when it comes to selling a business.
A question we’re asked more than any other by people wondering how to sell a company is, “When is the best time to sell my business?”
Timing is everything and here are five signs it might be the right time to sell your company…
Business is going well
One of the best times to sell a business is when things are looking rosy. Don’t make the mistake of waiting until your business performance declines before you start thinking about selling it. A healthy turnover, decent profits and a skilled, productive workforce are all highly desirable selling points. Being able to market your business for sale and highlight positive aspects like these will create a very attractive buyer proposition and allow you to command a higher price. So, quit while you’re ahead.
The market is thriving
Do you know what’s happening in your corner of the market right now? Keep a careful eye on market performance within your industry. Consider getting expert advice on current and forecasted trends. Smart business owners who want optimised value when selling their company benefit enormously from monitoring market conditions on a regular basis, so they can exit when the most profitable door opens. Got a business with international appeal? Adopt a global view and stay abreast of exchange rate changes that may be favourable to overseas buyers.
Your passion is fading
If you go to sleep at night with the creeping feeling you could be injecting more energy and focus into your business and wake up with a nagging bout of demotivation, perhaps it’s time to prepare your business for sale. As the years pass, we all change and it’s only natural to crave new challenges in life. Maybe you’ve already ticked off all your goals, so the impetus to keep growing your business simply isn’t there anymore. If you keep reluctantly forging ahead when your heart and mind aren’t truly in it, this can have a negative long-term effect on the performance of your business and reduce its eventual sale value.
You’re in a position of choice, not need
Arguably one of the best times to sell a company is when you don’t necessarily need toyet. An alarming number of business owners wait until they must sell their company before they prepare their exit. Unfortunately, this means they aren’t in the strongest negotiating position – because they can’t walk away easily if they don’t like the offer they get. Don’t back yourself into a corner. Stay in a healthy exit-ready position to give yourself options in case a suitable buyer does appear on the scene with the right price and terms.
Paying too much tax?
Some business owners make the decision to sell for tax reasons. One owner recently said to us, “If I could sell my business for the right sum today and subsequently only pay 10% tax with Entrepreneurs Relief then why would I not want to sell?” If this is the case for you, you may wish to consider the financial benefit of preparing your business for sale. However, we do advise you to be honest about the broader reasons for selling your business. Don’t do it just for tax reasons if you or your business aren’t ready yet.
These are only a handful of the signs it could be the right time to sell your business. Before you embark on the sale process, make sure you spend some time with an advisor from a corporate finance company such as Entrepreneurs Hub to assess the saleability of your business and the potential value you could achieve.
Contact us in confidence to find out more about how to sell a company for maximum value. Call 0845 067 8678 or email [email protected]