21 Dec When is the Best Time to Sell a Business?
In these economically uncertain times, many business owners have decided that it is time to get out of the game and sell their companies. While it may not seem like the best environment to do so in the current moment, excess cash in the hands of potential buyers have set in motion a possibly profitable scenario for owners looking to sell. Even if the market conditions are hospitable to selling a business, many owners come to their respective professional business broker with the same question: when is the best time to sell my business?
While it may seem counterintuitive, there is no set calendar date that indicates the exact time you will find success in selling your business. Rather, it depends on if certain controllable conditions are met regarding the business itself and you as the seller.
First of all, it usually takes close to two years of preparation in order to facilitate selling a business. You need to have all of your financial records in order and up to date to demonstrate financial legitimacy and stability of the company. You will need to set out to institute confidentiality agreements to upper management and other employees that will need to be aware that the sale is taking place. All of this takes time and effort in order coordinate and execute. Once all of that process has been completed with the help of your business broker, you will be one step closer to selling your business.
Another aspect of knowing the right time to sell your business is finding the correct buyer. Are you looking to maintain the legacy of the company that you have built, or are you simply trying to generate as much profit as you can from this transaction? The answer to that question will help you determine the correct type of potential buyer and will narrow your search to the correct parameters. If you are looking for continued success in your legacy, maybe selling to an employee is the right answer. If profit is your main concern, maybe the right answer is to sell to your competitor in order to have your business out of the way of his or her continued success. Determining this factor will also help you discern the right time to sell.
Finally, the ultimate factor that will help you figure out the right time to sell is you as the seller! Are you sure that this is the correct decision to make? Selling a business is time intensive, stressful, and irreversible. Once you have signed on the dotted line to sell, that is it, there is no going back on it. If you are ready to profit from your years of hard work and move on into retirement, then parting ways with your company will not be that hard. However, change is difficult for certain people, and a major transaction that steers your life in a certain direction may not be the best choice. It all depends on if you’re ready, as that is the right time to sell your business.
If you find yourself prepared and have questions about selling a business, it is best to employ a professional business broker with years of experience who can answer all of your questions. Contact Moche Hazout at Transworld Business Advisors today!