Considering Selling Your Business? You’re Not Alone
I read a statistic recently that claimed over 60% of business owners are considering selling a business in the next five years. It’s an interesting statistic that highlights a trend we have noticed in our own discussions with business owners. The last 18 months has been challenging for many, and a time to reflect for all of us. Whether 60% is entirely accurate or not, we know that a lot of business owners will be asking questions right now: How much is my business worth? How to sell a business? Where can I get help to sell my business? Let me just take a few minutes to suggest some of the answers to those questions. If you are one of the many thinking about selling, I hope this helps.
Valuation:
There are many ways to value a business, but most of them boil down to accountancy and mathematics. Multiples applied to historic turnover or profit figures. But we all know that there is more to your business, and its value, than just past performance. Any acquirer wants a well-performing business, but they are also interested in future growth, diversification, skills, markets, clients, technology and a host of other things that a simple multiple of historic EBITDA fails to take into consideration. If you want to know what your business is really worth, you need to take a broader perspective. And if you want an acquirer to pay what it is really worth, you need to show them that you understand why they should.
How to sell:
There are two broad categories of approach when it comes to selling – active, or passive. A passive approach might be to simply wait for someone to get in touch an make an offer, or a slightly more intentional version is to advertise your business for sale on one or more of numerous broker lists out there. At the other end of the spectrum is the approach we favour. An active approach to selling your business is the only way to ensure you can be certain that you have found the best acquirer and got the best value available for your business. By identifying and approaching strategically selected acquirers, you maximise the most important aspect of any sales strategy – choice. If you have a choice from a number of good options then you hold all the cards.
Getting help:
If we are to see a strong rise in the number of business owners selling their businesses in the next 5 years then, like in any market dynamic, we are going to see it becoming more favourable for the acquirer. This will make it even more important to get good advice and solid support from a trusted corporate finance adviser like Entrepreneurs Hub. Of course you’d expect me to say that, but I think my reasoning is fairly easy to defend. Firstly, any business that is to be sold needs to stand out from the crowd. A company like ours can help accentuate the things that make your company unique, and also work with you to build those areas of uniqueness so that you stand head and shoulders above the rest. Secondly, once you have caught someone’s attention, you need a blend of experience and expertise to see it across the line. If you are one of those business owners thinking about selling, we’d love to speak to you. Free and with no obligation of course. Or you can attend one of our webinars where you will learn all about how we prepare and sell a business like yours.
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FAQs – Selling your company
How do I sell my business?
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
How much can I sell my business for?
Determining your business’s value is more than just calculating a number it’s complex with key factors, that said the basic equation is actually quite simple. Read more…
How long does it take to sell my business?
The timeline varies depending on the complexity of the deal and how ready the business is for sale. On average, the process takes around twelve months – sometimes less, sometimes more.
While preparing your business for sale, Entrepreneurs Hub conducts in-depth research to identify potential acquirers. You’ll have the opportunity to review and approve this list before we make any approaches. Once the business is fully prepared – often the most time-consuming step, we begin marketing it. Typically, you’ll start seeing initial interest within a few months, with follow-up meetings happening shortly after.
As these meetings progress – coordinated and facilitated by Entrepreneurs Hub, you’ll begin receiving initial offers. At this stage, we’ll help you assess the strategic fit between your business and potential buyers. When you decide to move forward with an offer, an exclusivity period begins, during which the acquirer conducts Due Diligence (DD).
The DD phase typically lasts two to three months, depending on the complexity of your business. Once complete, the sale is finalised, and you’ve successfully sold your company.
How do I sell my business quickly?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
When is the best time to sell?
Selling your business is a major milestone, and the start of an exciting new chapter, whether that means new ventures or a well-earned retirement.
In our experience, the best time to sell is when you don’t need to – when your business is performing well – not necessarily tied to the calendar. That said, timing can still play a role.
Timing the Market
Strong economic conditions, sector growth, and buyer confidence boost valuations. Don’t wait for a “perfect” market – a well-prepared, well-performing business sells in any climate.
Plan Ahead (12–18 Months)
The best outcomes come from early planning: clean financials, solid forecasting and growth potential.
Spring & Autumn Are Active Periods
The M&A market is typically busier in spring and autumn while summer and winter tend to be slower due to holidays and year-end distractions. However, the unpredictability of deals and negotiations makes this hard to target. We do deals all throughout the year – the key is to work with someone who can keep driving the deal forward whenever it happens.
Financial Year- End
Selling your business well is a long process and aiming for your financial year-end milestone is a virtually impossible task. But it is worth bearing your financial year in mind as buyers will want to review the most up-to-date accounts available.
The best time to sell is when your business is ready, and you are too. With the right preparation and positioning the right timing follows naturally.
Can I sell my business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…