There comes a time when an owner should get out. Sometimes this is the result of a strategic plan; other times it’s due to limitations of the business model. Such an exit often comes in the form of selling the business. As an owner it can be difficult to determine the precise right time to sell the business. When it comes to the right time for selling a business, there are many things one should consider:
1. Business growth: Businesses with high growth rate have high chance of attracting buyers and higher price as it shows profit from the business in the future. Businesses with average growth rate do not generate as much buzz among buyers, however, if buyers do see potential, they might be interested. Businesses with low growth rate get passed on by the buyers due to the risks involved. It might be a good idea to sell a business when it is at a high, rather than when going downhill.
2. Motivation: If the owner is not motivated to run the business, he/she should consider selling the business, before the lack of motivation runs the business into the ground. This reduces the value of a business, therefore, it’s recommended to sell a business before the owner has a burnout.
3. The business has outgrown your skillset: As the business grows, some owners might find that they’re becoming less of an asset to the company. It might be a hard pill to swallow, but if the business doesn’t require your skillset, it might be a good time to sell your business.
4. The market might move against the business: If you think that an upcoming market trend might render your business irrelevant, it might be a good time to sell your business. It might be a difficult decision, but you have to realize that in the current market situation, no business is safe.
ValleyBiggs is an M&A firm that offers M&A services to customers who want to sell or buy a business. The company has expert professionals who help their customers every step along the way. The organization offers various services including acquisition assistance, exit strategies, BUY-SIDE M&A services, SALE-SIDE M&A services, business evaluations and many more.