Deciding to sell a business is an extremely personal decision and the factors at play will differ from person to person. For some, deciding to sell the business is based on financial reasons alone, whereas others may be looking ahead to the next opportunity or even early retirement.

Whilst it’s impossible to predict the future, considering the timing around selling your business can help you get the best price and ensure that you are getting maximum fulfilment out of your career.

If you are considering the possibility of selling your business, our blog post runs through the key aspects that should be considered before deciding whether or not to go ahead with the sale. 

Business Performance

Often the best time to sell a business is when it is performing well. Whilst it can be difficult to part with a successful business, a company that is increasing profits will be more desirable to buyers and thus command a higher price.

If you are considering taking a back seat in the business or withdrawing entirely to fund retirement or move on to a new venture, it is desirable to sell the business whilst it is doing well to achieve maximum return on your time investment.

Furthermore, business owners who lack experience may find that managing a thriving business may exceed their capabilities. In these cases, transferring the running of the business to a more experienced owner may be best for the long term success of the business.

Current Market & Sector Conditions

In addition to the performance of the business individually, the overall market and sector conditions may influence whether it’s the best time to sell your business.

Typically in a thriving economic environment, merger and acquisition (M&A) activity and value increase as buyers benefit from lower interest rates and are less conservative with their spending.

On the contrary, times of economic downturn generally result in a drop in M&A activity; making this a less desirable time to try and sell a business if it can be avoided.

Of course, the current condition of the sector may differ vastly from the overall economic climate. In industries with increasing sales and a bright future, there is likely to be greater demand for opportunities, allowing you to get a better price. 

Personal Satisfaction 

One common motivation for selling a business that we encounter is a lack of personal satisfaction. Entrepreneurship can be extremely exciting and fulfilling, but entrepreneurs may start to lose interest when the business grows as they are burdened with new responsibilities.

After running the business for several years, burn out is also common amongst business owners and trying to work through it can be detrimental to the long-term success of the company.

If you find yourself losing interest in the business and working on new opportunities or feeling unmotivated, it may indicate that it’s a good time to sell your business.

Selling the business will not only enable you to pursue new projects with the money raised from the sale, but will also allow you to focus your full attention on it; improving the chances of success.

Change of Personal Circumstances

Another common reason that business owners choose to sell their business is due to a change of personal circumstances, these often include:

  • Relocation
  • Ill health
  • Losing a loved one
  • Getting married
  • Financial problems
  • Having children

Running a business can be an extremely time consuming endeavour, and if a change of personal circumstances means the business will suffer; it could be beneficial to explore selling the business.

The Importance of Exit Planning

Whatever the reason behind selling the business, having an exit plan helps to ensure that you leave the business at the right time, leaving nothing to chance.

An exit plan is a comprehensive strategy that allows business owners to exit the company whilst maximising value and making a takeover by a new owner as smooth as possible.

Having a detailed exit plan not only helps you get the best return from your business, but will make you more attractive to a potential buyer.

Even if you have no plans to leave the business, having an exit plan is a great contingency tool to combat an unexpected change of circumstances.

Talk to the Experts

If you are a business owner that’s considering selling, timing your sale appropriately can help you get a better deal.

At Bristol Business Brokers, we can help you with every aspect of selling your business, from choosing the optimal time to sell through to finding motivated buyers and getting you the best deal.

To arrange a free, no obligation consultation about how we can help with the process of selling your business, call one of our team today on 0117 379 0117 or fill out a contact form and we will get back to you.