Three More Questions you Must be Able to Answer Before Deciding to Sell Your Business
A few months ago, we posted a blog that posed “Three important questions you must be able to answer before deciding to sell your business”. There are, of course, many questions that entrepreneurs need to get to grips with before they make one of the biggest decisions of their lives. Here are three more questions, and some useful guidance in how you can find the answer.
When should I sell my business?
There are a couple of ways to interpret this. Firstly, when in the lifecycle of my business should I sell it? Secondly, does the time of year or world events have an impact on the timing of a sale?
In terms of lifecycle, it won’t surprise you to know that value is positively impacted by growth. So, a company that is growing will be in better shape than a company that is in decline. That’s not to say a company that is static or declining isn’t saleable, but you might want to consider if there is anything you can do to boost sales or highlight potential growth before you sell.
Recent events have almost certainly raised some questions around whether it is right to sell now or wait for things to settle down. In our experience though this concern is largely unfounded. A good business will sell, regardless of what else is going on. The only exception is if world events have a direct negative impact on your business, but even then, this does not mean your business isn’t saleable particularly if the effects are temporary.
Selling your business is a process, not a one-shot deal. Acquirer profiles and seasons will change, and a good sales process will adapt to accommodate this. So, the question of when to sell really does come down to when you, as the owner, are ready to take that step.
Who should I tell that I am thinking of selling my business?
Most business owners are nervous about this question. On the one hand, it seems inadvisable to tell anyone, but on the other, this is a big decision, and you need to talk to some people you trust.
We looked at this question in more detail in our blog on confidentiality; when to release information and who to is a big part of the planning we do with our clients. But what about before you decide to sell? You know best who you can trust and who you need to talk to, but here are some thoughts from us.
- The further removed from the business the better. I am sure you have very trustworthy people working for and with you on the business, but the closer they are to the business the more impact your decision to sell will have on them. They may not go spreading your secrets, but they may well be unable to avoid bringing their own agenda into the discussion.
- Advice from your peers is preferable. If it’s advice you are looking for, you ideally want to talk to someone who understands the position you are in. That would be other people who own, or have owned, a business. As well intentioned as they may be, it is rare that someone who hasn’t been in your shoes will give you the best advice.
- Talk to the experts. Entrepreneurs Hub are always delighted to speak to business owners on a confidential and no-obligation basis about their options. We make no charge for an initial consultation and it’s a great way to help you think through some of the issues.
What do I want to happen to the business, staff and clients after I sell?
This will be a more important factor for some business owners than for others, and a lot of it depends on the nature of your business. But for most of you there will be, to some degree, a concern over what happens next for the people who have helped you get the business to where it is today. In fact, it may be one of your strong reasons to sell, recognising their future is better with the fresh investment and energy of a new owner in the driving seat.
The reason it is worth thinking about before you decide to sell is that it may have some bearing on how you approach the sale, whether or not you include competitors in the approach, and how long you stay involved post-sale, if at all.
If you are thinking about selling and would like our help in answering any of these questions, please get in touch and we will arrange a free, no-obligation virtual business review.
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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…