When is the best time to sell my business? 8 Signs from an Expert Business Brokers
As a business owner, selling your business is maybe one of the most important decisions you will make both from a personal and financial standpoint. However, asking yourself, “When is the best time to sell my business?” feels impossible to answer.
Whether you are selling a small business or corporate, there are many key factors that indicate it is time to sell your business or signal that you should begin preparing for the selling process.
Some of these signs are very clear but others can be hard to notice since selling your company can be quite subjective and emotional.
Should I Sell My Business?
8 Signs You Should Sell Your Business
1. You spot changes in your industry and ponder the future of your business.
You see negative headwinds in the industry whose impact could have a long-term impact on your revenue, profits, and the value of your business. Long-term impacts on your business may include:
- Acquiring customers becomes more difficult
- Market demands change
- The investment for required technology and automation is too great
- Major competitors coming into your market or industry
2. You see other business owners selling a company in the same niche receiving a great ROI
In the last few years, you’ve met business owners selling a business who operate in the same niche or industry receive fruitful payouts and attractive business valuations. While we all have different timelines and plans to close or sell a business, sometimes external elements such as a boost in the market accelerate our plans and decisions. Sometimes your sector, your industry, your location, your customer base, or your product niche becomes so compelling you get an offer or an opportunity that you just cannot ignore. In this case, it may be the best time to sell your business.
Finding out the true value of your business will prepare you for selling your business in the near or distant future. Receive a complimentary business valuation from expert business brokers at Brentwood Growth with zero commitment.
3. Wondering if you should sell your business to pursue other passions
If you’re exploring the idea of pursuing other business opportunities that you are more excited about, now may be the best time to sell your business. There are times when your business interests change. Maybe you get bored or perhaps you develop a passion or opportunity totally unrelated to what you are currently doing, and would like the capital or bandwidth to explore that opportunity.
These passions are worth investigating, especially if it has you questioning whether or not you should sell your business.
4. Passing down the business is no longer in the cards
You assumed your children would take over the business once it was time but you now realize that is no longer in the cards. Being able to work alongside your children and have them take the business over from you is a wonderful plan. There are many instances where that works out and just as many for a variety of reasons that it does not. As parents, we want our children to be their own people and live their dreams given the best opportunities. Sometimes, that simply means that they should not come into the family business and it is time to begin planning to sell your business.
5. You develop other interests over time
You have other interests in life that are more important. Just like above, there are times when we develop a personal interest that we are passionate about and want to devote full-time to that. It could be totally unrelated passion from the business but when this occurs it could be time to explore your interest and seek an exit strategy for business.
6. Life changes have you questioning whether or not you should sell your business
Let’s face it – most things in life you can not plan for. Life events occur that may cause you to reassess or reprioritize the sale of your business or its future.
This could be aging parents that require your attention, personal health reasons, an illness with a spouse or child, a divorce – any number of major life events that create the need for a major life change. While not ideal, this may be a clear indicator it is time to sell your business.
However, a consultation with a business broker and a complimentary business valuation may clear up any confusion or concern around selling your business.
7. You’re simply ready to sell your business and retire
You’ve determined a number, whether in valuation or profit, that you would like to meet before selling your business and now it has finally been met. You feel ready to close up shop, sell your business, and retire and live freely. Many business owners have a number or income goal that they set before listing their business for sale so they can determine whether or not they can live off of the sale of their business and their investments combined. When your accumulated assets, including the net after-tax proceeds from the sale of the business, surpasses the planned financial goal or set number, many people will decide, “I’m done. I’m ready to retire and sell my business”. How do you know when it’s time to sell your business? This is one of the best-case scenarios.
8. Your business no longer brings you passion
You wake up and no longer feel the same passion for your business as you once did. Owning and running a business is hard and goes through many cycles. We all realize this. Most times we go through the ups and downs and keep pushing through.
There can come a time where you look in the mirror and realize that the passion is gone and is not coming back. You realize, “Now is the best time to sell my business.” While confusing and sometimes emotional, seeking a professional business valuation can show you when is the best time to sell your business and guide you through each step of the process.
It may also allow you to find out when to begin planning for business succession.
Selling a Business in 2023
With all the joys and satisfactions that come with running your own business and being your own boss, there are real challenges in today’s environment:
Maintaining employees can be tough today, and COVID definitely caused a major disruption in the workplace. Now, many have gotten used to remote work and like the freedom and/or flexibility of remote work.
Simply finding and keeping workers at a reasonable cost is tough, and may have you questioning whether or not it is time to sell your business.
Inflation and higher cost of materials makes running a business more difficult
Prices and expenses are rapidly increasing due to shortages of a variety of essential materials around the world. Whether this is raw materials, finished goods, freight, and transportation, or labor cost, some of the cost can be pushed onto our customers many cannot. The end result is expenses are going up and margins are going down.
The bottom line indicates lower profits and potentially lower business values. The huge question is whether or not this is temporary or if inflation is here to stay.
Brentwood Growth Can Help
For most business owners, the process of selling a business is so muddled and confusing it can be hard to know where to start.
Our business brokers at Brentwood Growth always suggest starting with a business valuation so you can calculate the value of your business. Our business valuations are completely complimentary and you do not have to make any further commitment to work with Brentwood Growth. We consider the valuation an investment in our relationship.
If you would like to learn more about how to build a growth business and/or would like a complimentary, no-obligation business valuation, contact us today.