No matter which way you frame it, selling your business is a big deal. Are you confronted with the question, “is it ever too early to sell my business?” If yes, you're not alone.
Building a business from the ground up can take years of time, effort and exposure to risk, and you’ll want to make sure that you approach the sale – when the time comes – just right.
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Working out when’s the right time to sell will be one of the most important parts of that process. Today, we take a look at whether or not it can be too early to sell your business, along with some of the main factors you’ll need to consider.
To Sell Or Not To Sell
Whether or not it’s too early to sell your business will partly depend on your reasons behind choosing to sell. If you’ve experienced a period of ill health, and your priority is just getting out of the business so you can focus on recovery, then selling as quickly as possible – if you can afford to do so – may very well be the right thing to do.
If, however, you’re in no absolute rush and really want to get as much for the business as possible, then you’ll want to wait until everything slots into place perfectly. This could take a little while to happen, and will likely require working with a business broker such as Dexterity Partners.
Business Growth Potential
Another factor you’ll need to consider is whether your business is expecting substantial growth in the near future. Ask yourself, “If I sell my business now, am I prematurely cutting out its potential for growth?”
If it’s a younger business, and you’re just breaking into the market, it can be worth waiting until you’ve taken the business past some certain thresholds.
While you can try to prove that you’re expecting growth when you try to sell, that business growth will always just be a prediction until it’s actually occurred. If you can wait it out, it will likely help you get more from the sale.
Market Conditions
Another question to ask yourself is, “Should I immediately sell my business in response to current market conditions?” The amount of money that you can get for your business will be closely related to how the market is doing.
This will determine how much your business is able to make, the confidence that buyers will have in that niche, and to a certain extent, the amount of liquid capital that people have to spend on large purchases such as businesses.
If the markets are going through a rough patch, and you reckon you can weather the storm, it’s likely worth trying to wait things out. It might take a little more work in the short term, but it’ll likely mean that it’s far easier to sell the business once you decide the time is right.
Should I Sell My Business? – FAQs
- Should I sell my business?
If you're asking yourself, “should I sell my business?”, you need to seriously consider your motivations. The timing of selling your business is often influenced by your underlying motivations. If you're facing health issues and prioritize recovery, a prompt sale might be necessary.
Conversely, if maximizing profit is your goal and time permits, waiting for optimal conditions is prudent. Collaboration with a reputable business broker like Dexterity Partners can streamline this process.
- Is my business expecting imminent growth?
Assessing the potential for future growth is crucial. For young businesses on the verge of breakthroughs, waiting until growth milestones are achieved can significantly enhance the sale value. While projecting growth is feasible, tangible results bolster your negotiation position.
- How are the market conditions?
Market conditions heavily influence the selling price and ease of sale. During downturns, exercising patience to weather the storm may yield better returns in the long run.
Despite short-term challenges, a buoyant market enhances buyer confidence and liquidity, facilitating smoother transactions. In essence, determining whether it's too early to sell your business requires a nuanced evaluation of various factors.
From personal motivations to market dynamics, each aspect warrants careful deliberation. Engaging with a seasoned business broker ensures a well-strategized approach, optimizing sale proceeds while minimizing complications.
