When Is the Right Time to Sell My Company?
Deciding the right time to sell your company is never easy. The decision is usually based on the intersection of two components: (1) financial components (when does it make financial sense to sell?) and (2) personal components (what will my life be like if I sell?)
From our research, we have found that when all factors are taken into account (risk, growth and market conditions and taxes), 55 percent of business owners were projected to have more money in 5 years by selling their business now than by selling it in 5 years. Many business owners also felt they had excessive risk due to potential technology obsolescence, powerful competition, or areas of concentration in their business.
If you would like the tools and a demonstration to perform a similar analysis for yourself, join one of our exit planning webinars. In addition, due to the fact that smaller businesses can take approximately 9 to 15 months to sell at optimal valuations, timing is everything in maximizing value for your company. It's a lot easier to obtain a more interest from buyers when you are growing rather than when you are plateauing or even declining.
It is important to remember that it usually takes at least 9 months to sell a business and the buyer will usually want you to remain with the company for one to two years after the acquisition. So it is important to plan starting the process approximately three years before you anticipate one of the following happening:
- You need to retire soon
- You are burned out
- You aren't getting along with your business partners
- Your family doesn't get to see you enough
- You are ready to start a new venture