Considering the sale of your business, but want to ensure you would get the most money for what you have built? As the Midsouth’s largest independent brokerage firm, we’ve helped many business owners determine if it’s the right time to move on to the next phase of life.
Selling a business is complicated even before the process starts. A common concern is the timeline for the sale to close. Ideally, every business owner could sell their business immediately when they decide it’s time to take that step. Unfortunately, that’s not how the process works. Even at times when profits are the highest, there could be a shortage of buyers available.
However, in the past couple of years there has been an incredible opportunity for business owners to sell for maximum profit. Here are a few signs it’s the right time for you to sell.
Optimum Company Performance
The prime time to sell is when you notice significant increases in the company’s sales and profits. Businesses with a clear track record of increased sales are more attractive to potential buyers. If your overall profit has been growing steadily, even with seasonal fluctuations, you can capitalize on a strong business valuation.
Start by reviewing the company’s historical revenue patterns. Note the days and times when the sales and profits have increased and remained high for long periods. Also, identify the reasons why these changes occurred and what the company did to maintain this level of success. Businesses with strong leadership and systems in place that drive profit are in a better position to handle a transition during the sale of a business. This could be a strong selling point to potential buyers.
Changing Industry Trends and Performance
On the flip side, consider whether or not your business can remain competitive in an evolving industry. There may be too many changes to keep up with or the business can no longer perform at its optimal level. Perhaps the business could even be turned around with a charge of new energy or structural changes.
In our experience, burnout is the most common reason business owners are ready to sell during industry changes. Advancing technology and new industry regulations are constant and require a dogged determination to maintain. After several years of this, many business owners start to daydream about other ways to spend their time.
If you’ve continued to see declining sales then you may want to get out sooner rather than later. While you may not receive the same value you once would have during the peak performance of your business, you may receive more today than two years from now.
Do not sell any business quickly and at the last minute. You most likely won’t get a fair price for its worth. In a worst case scenario, you might skip a few legal requirements and become open to facing lawsuits. The average time that it takes to sell a business is six months at least. You need enough time to prepare an exit plan.
Do you find yourself returning to the same idea repeatedly: selling your business and moving on to something else? That’s an early sign it’s time to map out an exit plan and start looking at things like a business valuation. Taking these beginning steps doesn’t commit you to selling today, but could make the entire process smoother once it is time to list the business.
How a Business Broker Helps
A business broker assists sellers with every step of a business sale from determining the value to advertising. At Alliant, we will screen potential buyers, conduct interviews and negotiate prices. We help you build an exit plan of when and how to sell for the maximum profit you deserve. We also only receive a Success Fee when we close the sale.
If you aren’t sure if now is the right time to sell or not, contact us today for a free consultation.