When is the Best Time to Sell Your Business?

Over the years we’ve seen many people who had the opportunity to sell their businesses, but didn’t. Covid-19 is a good example of this. Before the pandemic, entrepreneurs had offers on the table, decided not to sell, and then went bust.

It is crucial to remain prepared for unforeseen challenges. In addition to pandemics, numerous disruptive technologies are emerging in the market, which could significantly impact your industry.

So when should you sell your business? The best time to sell is now.

However, wanting to sell and being ready to sell are completely different things. If you don’t have a great management team to run the company, you’ll sell the business with you in it. Or, a large portion of your consideration (the money you receive) will be attached to your future performance in the company.

Removing yourself from the operations is only one of several factors that influence how valuable your business is in the eyes of buyers.

Therefore, step one is to create an exit plan. This includes making yourself unnecessary in the day -to-day functioning of your business.

Collaborative leaders working on a growth strategy.

Unfortunately, it’s difficult to recruit good management to run a business. It’s very unpredictable.

Hiring an employee to run your company is risky.

50% of the time, it works.

50% of the time, it’s a disaster and the business is destroyed.

So here is the recommended solution:

Acquire or merge with another business that already has an effective management team in place.

This approach is advantageous because an entrepreneur who successfully operates a similar business possesses the relevant management and practical experience you seek.

Additionally, this strategy enables you to transition into a non-executive role within your company.

Therefore, consider acquiring or merging with another business before selling.

However, it is important to note that most small business owners lack the time or the skills to accomplish a merger or acquisition.

A better solution is to bring in a partner to handle such tasks.

This would almost guarantee making the business more saleable and command a high multiple of earnings in offers from buyers.

The resulting value from a future sale would more than justify sharing equity with a partner.

If you want to learn more, talk to an expert at: www.ExitAuthority.com