Should I Sell My Business Now? 3 Reasons to Say “Yes”
What an incredible business-ownership journey you’ve had! You’ve poured your heart and soul into your venture, kept it afloat in tough times, and watched it grow. But now you’re asking yourself, “Is it time to move on? Should I sell my business now?”
Selling your business is one of the hardest decisions you’ll ever make. This company is your “baby.” Maybe you built it from scratch. And maybe you’re worried—about how much money you’ll make from the sale, or whether your business will survive without you.
So, how do you know when it’s time?
The truth is, there’s no one-size-fits-all answer. Let’s explore three reasons why now may be a good time to sell your business.
Reason 1: Sell Your Business When It’s Strong
Your business has seen ups and downs. A downturn may tempt you to consider selling. But ideally, the best time to sell your business is when it’s flourishing.
Thriving businesses receive higher valuations and attract more buyers making enticing offers. Buyers are drawn to profitable businesses not only because they want to make money, but because financing is easier to secure.
How can you recognize when you’re at the top of your game? According to Vincent Côté, Broker and CEO at Transitions Business Brokers, it’s usually “a peak in financials.” This means rising revenues and profits over the past few years. Or maybe you have “significant customer growth which is just starting to translate into sales,” he said.
What else? A healthy balance sheet, a sturdy customer base, efficient processes, or a solid growth plan are all signs that now may be the perfect time to sell.
But before you do, ask yourself, “Can my business run well without me?” To maximize your company’s value, work to decrease owner dependence, install a competent management team, and make your systems and processes repeatable and teachable.
Did You Know...
Thriving businesses receive higher valuations and attract more buyers making enticing offers. Increasing profits, a steady rise in customers, and a solid growth plan all signal it may be time to sell.
Reason 2: Sell Your Business When the Market Says So
Listen. Do you hear the market whispering? Maybe it’s telling you to seize an opportunity—or warning you about a looming threat.
A robust economy, low interest rates for buyers, an uptick in sales prices, and a surge in acquisitions of businesses like yours—these are examples of opportunities.
What about threats? Imagine if your products or services went obsolete, your company fell behind on industry trends, or you had to compete with more technologically advanced rivals. Other external challenges might be the entry of aggressive competitors, competitor mergers, or changing regulations that make it difficult to operate.
Reason 3: Sell Your Business for Personal Reasons
Let’s face it: business ownership is personal. And sometimes, selling your business is a deeply personal decision. Your personal factors may be negative—but “it’s better to sell when you’re confident and feeling good about your future,” said Côté.
Here are examples of positive personal factors motivating a sale:
- Retirement: If you’ll have enough money to retire and you find yourself dreaming of freedom, family time, and finding a new identity and purpose outside your business, it may be time to plan a sale.
- Time for a Change: If your professional goals have evolved, maybe it’s time to seek a fresh opportunity. This is especially true for serial entrepreneurs who continually look for new ventures. By selling your business, you can raise capital to pursue your new interest.
- Relocation: Family-related factors, better economic conditions, or the desire for a change of pace may lead you to sell your business and move elsewhere.
Conversely, negative personal factors like these may influence your choice:
- Health Problems: Your health has changed, and it’s hard to carry on. Or you need to focus on caring for an ill or injured loved one.
- Other Sad Circumstances: Tragic personal factors, like death in the family or divorce, may force you to sell. Difficulties with a business partner can also lead to an exit.
- Burnout: Low motivation and loss of enthusiasm can erode the passion you once felt. If you’ve checked out permanently and are no longer making smart business decisions or investing in growth, maybe it’s time to cash out and find something new.
Remember, selling your business and transitioning into your next stage of life carry big emotional and financial consequences. To prepare yourself for the sale, ask yourself some personal questions.
What’s the Number-One Best Time to Sell Your Business?
Of these three reasons to sell a business, which matters most? “You’re probably not going to time all three,” said Côté, who believes it’s best to sell for personal reasons, when your business is strong, or both.
And who knows? If the stars align in your favour, you’ll also be selling when an opportunity in the market shouts “Yes!”
“Should I sell my business now?” If you’re not sure, a Certified Exit Planning Advisor (CEPA) and seasoned business broker can help you decide. We can also help you prepare your business for sale and plan for the “business-sized hole” you’ll have in your life after the sale.
Sell with confidence! Engage the Transitions Specialists today.