Is there a best time, an ideal time, to sell your company? The answer is highly personal, but my experience with business owners has given me some insight into how you know the time is right.
First, the time to “plan to sell” is long before you’re serious about the process of selling. I always advise owners to build your business as if you’re about to sell it. If it’s always in a “sale ready” position, you have a much more flexible exit at any time. One good reason for planning ahead is to get clarity on your financial goals and what it will take to fund your lifestyle after you move on. You’ll need to have conversations with your family, your financial planner, and yourself about what you need and want from the sale.
Then, knowing what it will take to fund your retirement or your next phase, you can get a broker’s opinion of value of your business in the current market for a clearer picture. If your company isn’t worth what you’d hoped, you have a couple of years to change its structure, grow its value, or grow your other financial assets to ensure you can meet your goals. Even if you decide to sell today, it can take months to find a buyer and close a deal, so don’t wait until it’s too late, and you’ll do anything to get out from under your business.
But how do you know when it’s time to sell? Here are some indicators.
You’ve lost your passion for doing the work and know you’re getting burned out. Maybe you are frustrated with your employee revolving door. Maybe your clients or tenants are finally getting under your skin. Maybe you’re just tired. These are factors that put the future value of your business in jeopardy. Owners who have lost the fire in their belly are at risk of losing clients and passing up opportunities to grow and thrive. Once your business starts to lose revenue, it will be harder to find buyers and harder to get top-dollar offers.
You’re not optimistic that investing in the company will pay off. You know you’ll need to upgrade technology, make significant investments in marketing, or hire several new employees to grow the business. But your timeline, your concerns about local, state, or federal policies or taxes, or your current cash flow are making you rethink your plans. A broker can help you find buyers or investors who have the cash, the energy, and the optimism to take on capital investments. In fact, many are looking for companies just like yours.
Retirement or other adventures are looking better and better. If you’ve been successful your whole career, you may not be motivated to keep pushing. Maybe it’s time to move closer to the grandkids or take up golf. It’s better to let someone new and fresh take over, someone who will be thrilled to build on your established success and operational expertise. Many brokers will tell you that buyers are looking for a business with the potential to grow – they want opportunity rather than a company that has maxed out in the current market. This can make you more appealing compared to a company that’s running full speed and can almost be intimidating to a buyer.
The best time to sell your company is just before the peak of its success, while it still has potential. An experienced business broker can help you understand how close you are to the right moment, identify a “push” that might up the value, and connect you with buyers who are looking for the right company to buy. If I can help you start planning to sell your company, a good first step it to find out what it’s worth.
About Patrick Hurley:
He’s a Tallahassee native with over 20 years of experience in property management, real estate, construction, and business brokerage. Having owned, operated, bought, and sold property management companies in the past, Hurley is uniquely positioned to help others in the industry find their exit. He’s been described as dependable, highly efficient, effective, and hard-working with a no-nonsense attitude. He takes pride in his professionalism and attention to detail and focuses on his client’s desired outcome.
Patrick still meets with every client and passes along as much knowledge as possible. He frequently gives back to the property management community through professional speaking and value-packed article content. When he’s not helping others with a business transition, you can find him adventure-seeking with his young family.