When is the right time to sell your business? | O'Keeffe & O'Malley

When should you sell your business?

Sep 11, 2017

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?

At O’Keeffe & O’Malley, we’ve seen it all. And we’ve found that the same reasons to sell apply to many business owners. Here are some of the most common signs that showed people it was time. Do any of these ring a bell?

  • You no longer want to take risks. Many business owners reach a point where they’re tired of the gamble. If you find yourself being squeamish about making big investments in your business, take a moment to assess. Have you stopped looking at potential opportunities and less willing to take on any debt? It may be time to plan an exit.
  • The business is performing well. Why should you want out when everything is going well? Nothing is more appealing to a prospective buyer than solid performance. Waiting until the market shifts or a competitor makes a big move could introduce risk. And that could impact your bottom line.
  • 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.
  • 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, 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 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. Often, the path a business needs to take is clear. But let’s be honest: change is hard.
  • 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 go over all their options and make choices that work for everyone.
  • It’s a sellers’ market. It’s hard to argue with the bottom line. And if there’s not a lot of deals out there for investors to choose from, you might get a premium for your business. We’re still in the midst of a sellers’ market now, but the landscape could shift in the near future. Consider talking to an M&A advisor if this piques your interest.

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, don’t delay. O’Keeffe & O’Malley can help you investigate your options. Give us a call at 913-648-1085 for a confidential meeting.