If you are a business owner who has ever considered selling, chances are you’ve asked yourself, “Is it the right time to sell my business?”. Just like real estate, the stock market or any other type of investment opportunity, timing the sale of a business can be tricky. The appropriate time to sell is not only dependent on the market, but also the state of your business and your personal goals. This makes the right time to sell a business different for everyone. The most important step is to consider what a successful sale means to you, and what you seek to gain from the transaction.

From a monetary perspective, the most appropriate time to sell a business for the highest possible profit will be primarily based on how your business is performing. Ideally, you will want to sell when the company is at its peak, or at least on its way there. If your business is growing, it will appeal to buyers and the price can be based on its future sales as well as current success. This means it can be priced higher and buyers will be more willing to pay it because they will be looking to purchase a business that has future potential. Similarly, if your business has experienced record profits it would be a great time to sell for the highest possible price.

Your company doesn’t have to be churning out record profits for it to be an ideal time to sell. If the business is stable and consistent, it will also be very attractive to prospective buyers. Consider preparing your business to sell if it is on strong footing and producing a steady profit quarter after quarter and year after year. Also consider any strategic advantage the company might have over the competition. Do you own any patents? Is the location a key to the success of the business or is it in a ‘hot’ area? Anything that separates you from the rest of your industry can add value to your business and help drive a successful sale. Gain a good understanding for how your industry as whole is performing. If it is expanding, it could be a good idea to strike while the iron is hot. Conversely, if the industry for your product or service is shrinking, you may have a short window in within which you can sell to maximize the sales profit.

External economic factors can also affect the timing of the sale. If the overall outlook of the economy is optimistic, higher business sale prices are achievable. If experts predict a lot of activity in mergers and acquisitions, it is also a favorable time to sell. This means that investors and businesses are ready to spend money. According to a survey of small business owners, conducted by BizBuySell, more businesses were sold in 2018 than in any other year, and that trend is expected to continue through the remainder of 2019. The climate for selling is also good when interest rates are lower. This means borrowing is cheaper and businesses prices can go higher and still meet the budgets and expectations of buyers. When it is easier to borrow money, the market is full of qualified buyers. This demand translates to higher sale prices. Right now, the SBA is making borrowing easier than ever, which results in a higher demand for proven, successful businesses.

Often overlooked, personal goals also require significant consideration when trying to find the right time to sell a business. Do you have financial goals outside of the business, such as putting a kid through college, travelling or beginning a new business venture? If so, the business may be the key to unlocking those financial goals. Have you lost some of your passion for running the business? It might be a good idea to sell before it becomes too much of a burden. Health issues or concerns are also valid reasons to prepare your business for sale. If you are close to retirement, reaching a specific age or waiting for a spouse to retire may be things you consider as well.

Keep your finger on the pulse of the economy, the financial health of your business and your industry. Gather as much information as you can to determine an accurate market outlook. Use this information, along with your personal goals and aspirations to figure out the best time to sell your business. It may be right now, or further down the road. You might decide that there are goals you want to achieve before selling your business, including increasing its value so you can demand a higher asking price. Even if you don’t plan on selling in the immediate future, it is a good idea to have an exit strategy in place. Getting guidance from a business broker can help you figure out where your currently stand with regards to the current market value of your business and how you can prepare your company for sale.

Are you a current Southwest Florida business owner who has considered selling? Corporate Investment Business Brokers (CIBB) is a licensed brokerage based in Fort Myers that has brokered over 3,000 mergers and acquisitions over the past 30 years, dealing with businesses of all industries and sizes. We can help you properly time the sale of your business, put an exit strategy in place and get the highest possible profit. The process begins with a free business valuation estimate, so contact us today to get started.