If you have worked to build a business from the ground up, or if you have obtained a company and are dedicated to making it more successful, you understand the stress associated with the idea of selling. Whether that time is decades or months away, the concept can keep you up at night. How can you keep the value of your business? When will you know it is the right time to sell?
Selling your business could be a wise financial move for many reasons; maybe you are ready to retire, burnt out, or simply want to move on to something different. Whatever the reason, consider these factors as you determine whether your business is ready to sell. They may surprise you, and the time to leave could be when you least expect it.
First, consider the current financial trajectory of your business. What are your current profit and net revenue? Are sales trending upward? You want to sell when your business is doing well. This may feel backward; however, too many business owners miss their window of opportunity by riding out a success wave only to sell a few years later for less money. In many cases – you want to sell when financials are trending upwards.
When you sell your business, plan to leave behind a strong team. Having strong leaders and dedicated, capable employees is essential in creating a smooth transition of ownership. These are the people who will ensure that a company continues to hit its goals, even during a sale and change of ownership.
Evaluate the current economy. Selling during a recession will likely leave you with a much smaller profit than if you sell when the market is on the rise. You may get the most out of your sale by waiting to sell until the market is in an upward swing.
Additionally, consider the sales trends within your market. What are similar businesses selling for right now? Is demand for your type of business high or low? This will give you a good read on whether or not now is an ideal time to sell.
The Right Person
The right buyer will make or break the long-term success of your business. So, even if everything else seems to be in line, your business is not ready to sell until you find your ideal buyer. So, be willing to wait it out, even for a few years, to find a buyer who you feel confident in and who is willing to pay a fair price.
After the countless hours, effort, struggles, and care you have put into this business, you want to keep the long-term game in mind. It’s never time to sell until you find the right person for the right price.
Don’t Do It Alone
If you feel like it is time to begin the strenuous planning process associated with selling your business, seek assistance from a financial advisor who specializes in this area. A financial advisor will not only ensure that you are selling at the right time; they will walk you through the tax planning, employee compensation process, and value estimation. In addition, they will be your partner in ensuring you get the most out of this sale.
At TrueNorth Wealth, a leading investment company in Utah, we are fee-only planners that specialize in assisting people in selling businesses. We help owners through the planning process to have a successful sale and reach their financial goals. Because we are fee-only financial planners, you can have confidence that we have your best interest in mind. So reach out today for a consultation, and we can begin to assess your current business situation, prep your business for sale, and find your ideal buyer.