When is the right time to sell your business? This can be a complex question. There are many factors that can lead you to the conclusion that now, and not later, is the time to sell. Here are some factors that author Tim Fries covers in his recent article in The Tokenist. The title of the article is, “When Is The Best Time To Sell A Business?”
Growth is a good thing. If your business is experiencing significant growth, then you have a strong indicator that now could be the time to sell. Fries states, “What never varies is the fact that growth is a key component buyers will look for.” Growth will help you justify your price when you place your business on the market.
Another item to consider about growth is, the bigger you get, the bigger the risks you have to face. You must ask yourself if you want to take on bigger risks, or is it time to sell your business.
Lay Of The Land
It is good to know the “lay of the land”. Have there been businesses similar to yours that have sold or were acquired recently? If there have been businesses like yours that have sold, then this is a good indicator that there is interest in your type of business. Reviewing businesses similar to yours that have sold recently can help you determine how much buyers are paying for comparable businesses.
Other factors that can influence the optimal time for a sale is low taxes, low interest rates, the overall economy or a large competitor entering your area.
Now might not be the time to sell your business, but you never know when the right time to sell may arise. It is important to have your business ready to sell. It takes time and preparation to get your business ready to sell. EBIT can help you determine if now is the right time to sell your business and what steps you need to take in order to be prepared for when the time is right.