Timing is everything. But knowing when it’s time to sell your business can be tricky. With so many factors in play, how do you know when to exit? The decision to sell is never an easy one, but the owner’s desire to sell is perhaps the most important factor. Depending upon how your business has fared during the pandemic, this could be a good time to start planning your exit.
Businesses that have survived or even thrived over the last nine months are in demand, and if revenues continue on an upward trajectory, sellers will be pleased with their valuations and may wish to sell soon. They don’t want to wait for market shifts or for a competitor to make a big move that could affect their bottom line.
Other business owners who have not had good fortune during this period are willing to sell because they no longer want to take risks. They may have determined they need to make a big investment in the business or take on debt to survive or take the business to the next level, and they’re tired of the gamble.
Pandemic aside, following are other common signs that showed people it was time to sell:
- You’ve reached a specific goal. A business sale should help ensure your financial future. Reviewing an offer for your business isn’t the time to make sure the math works out. Work with your mergers and acquisitions (M&A) advisors and financial planners now to determine what business goals must be met to set you up for success on your timeline.
- Health of the owner or the business. Health issues are a major reason that business owners decide to sell, whether it’s due to the health of the owner, a close family member, or the health of the business itself.
- The health of the industry or the economy. The health of the industry may or may not be affected by the health of the economy, so both need to be considered independently. Once evaluated, is it more important for you to get your optimal price, or to time your exit to your best advantage?
- You’re ready to focus on something else. Owning a business is a labor of love. It requires dedication and sacrifice – and it can be exhausting. If running your business is no longer energizing and fun, it might be time to reassess. Maybe you’re ready for another venture. Or maybe it’s time to turn your attention to grandkids. No matter what’s next, you have options.
- The people are driving you nuts. Perhaps you’ve outgrown your partnership. Or maybe employee issues are wearing you out. You’re not alone. Many partners move in different directions after years of unified efforts. And providing health insurance, profit sharing, and retirement plans have worn down many a business owner. It’s OK to only want to manage yourself.
- The marketplace has changed. Are you willing and able to change with it? You may be facing needs for more equipment, people, technology, facilities, or capital. Are you up for it? If you’re not excited and invigorated by the challenge, think about why.
- The team is ready. Is your leadership team a well-oiled machine? Are they able to articulate a strategic plan for your organization’s future? Solid leadership and a plan for future success are incredibly attractive. If your business is poised for growth, that can increase its value to potential buyers.
- The family is ready. A family-run business has its own challenges. And sometimes members of the family are ready to do something else. Perhaps that means a generational transfer of ownership. Or maybe it means the family wants to walk away entirely. An M&A advisor can help families in this situation assess all their options and make choices that work for everyone.
You’ve worked too hard to sell on a whim, on someone else’s timetable, or when you’re not ready. But when you think it might be time, we’re here to help you plan your exit. We’ll help you:
- Be prepared. Have all of your documents prepared and be ready to sell at any time.
- Plan ahead. Make a plan so you can sell on your own time frame.
- Follow the plan. Make decisions that are consistent with your desire to sell.
- Monitor your progress. Measuring against your plan will keep you on track and ready to sell.
- Be patient. It doesn’t happen over night, but you’ll be ready when the right buyer is presented.
- Keep a clean house. Keep records and assets in order to make a good impression on potential buyers.
- Run the business as usual. Keep your eye on the ball and run the business as if you were keeping it forever.
Give us a call at 913-648-1085 for a confidential meeting to discuss your options.