You’re Ready to Sell, But is Your business?
“I have found the perfect house,” my wife said. “The agent says it’s cosy and has a low-maintenance garden, and is situated in a great catchment area.” All of that sounded lovely, until we went and had a look… it was cosy alright, barely enough room to swing a cat. The low-maintenance garden turned out to be equally small and wall-to-wall patio slabs. But it was in a great catchment area, just down the road from the best school in town which meant that we were the 5th viewing of the day and there were already enough offers to push the price well over the original asking price. Needless to say, we walked away. Anyone who has bought a house will be aware of the need to take estate agent descriptions with a pinch of salt and know that you need to look under the surface to be sure what you are buying. When it comes to selling a business, any acquirer worth their salt will also know that they need to look under the surface to make sure what they are buying is worth the investment.
So what about when it comes to selling a business?
I have met many business owners who have been trying to sell their business for years, and there is no shortage of statistics that will tell you only 2 in 10 business owners successfully sell their company. If you are wondering why they haven’t managed to sell then let me explain. A buyer will look at two things when deciding whether to pursue a deal or not. Initially they will be attracted by the green lights – performance, products, markets, synergies – things they can see from the outside. But when they start to work on the deal their focus will switch to looking for red lights, or reasons they should walk away or reduce the price offered. All of these red lights revolve around risk and there are potentially hundreds of things that can raise risk in the eyes of a buyer. The link below is a 12-minute podcast that introduces five of the most common issues. These include:
- Too many SPOFs or Single Points Of Failure: over-reliance on single suppliers, key staff or customers will make a buyer nervous
- Contracts that are non-existent, verbal only, or have change of ownership clauses could derail a deal
- Poor financial accounting will make a buyer question the numbers they are basing their valuation on
- Identifying and protecting intellectual property in the business will give a buyer more confidence in what they are taking on
- Dependence on the owner is the final of the five and can be a real issue – if the business falls apart without you in it, what are they buying?
Don’t give up…
If you are ready to sell, but you suspect your business is not then don’t give up. Entrepreneurs Hub are business brokers with a difference. We are not just interested in taking your business to market, we are interested in taking your business to market in the best shape possible and as a result maximising value. We work with business owners to prepare their business for sale, however long it takes. Why don’t you get in touch and we would be happy to meet with you, in strict confidence, to discuss your situation.
Similar Insights
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…