How To Know When It’s Time To Sell Your Business

As business advisors, we’ve seen owners sell their companies for a wide range of reasons, most of which are personal. Are you experiencing health issues? Are you burned out and just don’t want to come into work anymore? Are you ready to retire and enjoy leisure time? Have you lost your passion for this particular business? Are you ready for a new opportunity? All of these personal concerns, and hundreds of others, are valid reasons for deciding to sell your business.

Financial Reasons To Sell Your Business
When it comes to “letting go of your baby,” you might be primarily motivated by financial reasons. And rightfully so. You’ve invested in the company, taken all the risks, worked hard…it could be time to cash in on the rewards.

As business advisors, these are financial scenarios we commonly see that compel people to sell their businesses:

• need the money
• want the money
• can’t keep up with debt obligations
• can’t keep up with current or future capital demands of the business
• partner(s) or shareholder(s) want to cash in
• tax ramifications

Any or all of the reasons listed above can make it the right time to sell your business.

Apart from personal and financial reasons, there could be compelling external reasons – in the marketplace – to sell your business. Trends in your business, the industry, and even the economy can influence whether it’s time to sell your business.

Are competitors starting to gnaw away at your market share? Is the size of your target market dwindling? Are disturbing developments cropping up in your industry? Are you going to have to invest heavily in inventory, technology, or equipment to keep pace with other businesses? On the plus side, are a host of buyers suddenly attracted to your type of business? Is there vast upside potential for a new owner to exploit?

In all of the scenarios listed above, there can be a narrow window in which your business has reached its highest value, making it a great time to sell.