Is it time to sell your business? You may have pondered the question recently thinking that it would be nice to cash in on your hard work, or maybe you’ve just lost your passion for it. Whatever the reason may be, developing a strategic plan, and sticking to it is the key to not only getting through the sale of a business, but setting yourself up for success and satisfaction after the sale.
Get Your Priorities Straight
Start the process by setting your priorities and expectations. What do you seek to gain by selling your business? Are there goals that need to be met before you do? Consider both your business and personal goals in this process. Life often presents us with unexpected challenges. Are you prepared and equipped to deal with them after the sale of your business completes? Get ready for this transition by creating a plan for managing both your time and finances in the next chapter of your career.
It is also important to take stock in your enjoyment and capacity to run your business. Is running the business fulfilling or draining? Is there one undesirable component that is driving your desire to sell? Has operating it become overwhelming? Some self-reflection will help you to shed some light on the real reasons for considering selling and help you decide if it is the right path to take.
Should You Hold Out for More Money?
It can be difficult to determine the right time for selling if you are trying to sell your business for the highest amount possible. Obviously every business owner would like to get more money from the sale of their company, but many factors make timing the market a tough task. As a business owner, you should look at your business as well the industry as a whole.
Factors to consider when trying to get top dollar for your business include market demand for your company’s goods and services and the competitive landscape. How do you stack up to the competition? Is your industry healthy right now? If the industry or product demand is shrinking, you probably have a short time frame in which you can sell and maximize your profit. If it’s growing, the timing is critical due to changing multiple values. These values can change quickly so it is important to know the current industry multiple, and know in which direction it is trending. Also consider your cash flow and the current growth of your business. I you believe that you can increase cash flow and therefore raise the value of the company, it may be worth holding out a little bit longer.
With all of the complexities surrounding the selling process, it may be in your best interest to contact a professional to help you determine the right time to sell your business. A professional who understands the industry, such as a business broker, can help you navigate through all of the intricacies of creating a plan to sell, as well as a succession plan. They will help you to weigh all of the necessary factors, both financial and personal, to help you make the best decision.
If you are considering the sale of a business you own, contact Corporate Investment Business Brokers for a free valuation estimate. We will help determine if selling is right for you.