When is the best time to sell your business?

Business Insights

When is the best time to sell your business? I’m asked this question so often, mainly because at some point people come to the realization that they don’t actually have an exit plan. When I ask business owners if they have an exit strategy 8 out of 10 say no!

I completely understand that when people start a business venture, selling it is often the last thing on their mind however, the sale of your business ideally needs to be part of your overall strategy, the one that you develop sooner rather than later. Some people do set up lifestyle businesses that they never plan to sell and that’s fine too.

If you want to sell your business for X amount in order to retire then you need to be clear what that figure is – what is your number?

Also consider who might buy your business. Competitors can be potential buyers as they can see the benefit of taking you out of the market and acquiring your client list or products.

Selling your business when it’s about to peak and showing a pattern of growth and demonstrating upward trends is attractive to potential buyers.

Having said that many business owners have the most fun during the high growth upward trend and they start to thinking of selling it when things start to decline or get much harder.

Also consider what your business needs to look like to be attractive to a potential buyer. When you decide to work towards exiting you need to make sure the business can work without you. Installing management structures, systems and processes is essential.

Selling your business does not have to be daunting because just like selling a house there are companies who will act as agents on your behalf. These agencies can work with you in the very early stages to help you prepare your business for sale and ultimately find prospective buyers and negotiate the sale for you.

One thing many business owners don’t consider is how they will feel when the business is sold. I have known business owners who have felt a great sense of relief and achievement when they walk away from their business but I have also known people who have felt a great sense of loss. For many business owners their identity and status is wrapped up in the business. Contacts, social circles can all be intertwined. Having a sense of purpose is what make many business owners and entrepreneurs feel alive, solving daily challenges becomes normal. Being cut loose without a plan for what you will do to replace your time, energy and for some status can come as a bit of a shock to the system.

Having said that, be careful to plan for the future but don’t take your finger off the pulse of your business until the sale is complete. If you spent too much time planning for life after the business is sold you might drop the ball and lose the sale.

Whatever stage you are at with your business this could be the right time to stop and think:

1. If I sold my business how much would I want? What’s my number?

2. What does my profit need to be in order to be attractive to a potential buyer at that price (there are formulas to value a business)

3. What would my business structure need to look like, to run without me?

4. Who might buy it?

5. Who could I engage to help me prepare to exit?

Bev James is a business mentor, best-selling author of DO IT! or DITCH IT, CEO of The Coaching Academy and Director of Mentoring at Start Up Loans. For free daily tips, business templates, workbooks and app visit www.bevjames.com,