Timing is everything: when should you sell your business?

14/10/2022

Selling your business is not a snap decision. You need to start preparing your business around two years before you even put it on the market.

Of course, you need to consider what’s happening in your own life and what your ideal scenario is.

But the market conditions will play a big role in when you should sell your business.

To make sure you sell at the right time, you will need to make sure various factors align with each other.

To do this, consider the following:

When do you want to sell?

You might know exactly when you want to sell your business. But, your ideal scenario might not be possible.

Consider what stage of your life you want to be at. Do you want to sell up and retire straightaway? Or move on to your next venture?

Either way, that is not something you can do overnight.

Your business needs to be running like a well-oiled machine before it goes on the market.

So, you need to factor in the time it will take for you to optimise your business’s operations.

This includes beginning to phase out your responsibilities early on.

What is the condition of the M&A market?

If the M&A market is in a slump, it might not seem like the best time to sell your business.

Yet there might still be people willing to invest in your business. And, if you’re looking to buy another business on the sale of your current, it could work out in your interests.

You also need to consider how saturated the market is. In the case that there are plenty of businesses being sold, why should someone invest in yours?

Making sure your business is in the best condition possible will strengthen its position.

Market conditions are volatile, so bear in mind that predicting when circumstances will change can be difficult.

What about the market your business trades in?

Think about your industry, is it possible for your business to continue to grow?

You might be doing everything right in your business, but this doesn’t mean it is flourishing.

If the market it operates in is declining, this could stunt your business’s growth.

For example, if your profits are booming, but you rely on imports, a fluctuating pound will be a cause of concern.

Buyers will also want proof that the business can adapt and keep up with competitors.

To do this, ensure your business has a thorough business plan and is able to adapt to changes.

How can you align these?

To make sure you’re selling at the perfect time, you will need to take a pragmatic approach.

Think back to your vision for the business and make sure you are not neglecting your priorities.

Your priorities will help you to decide what you are willing to compromise on, and guide the sale.

In our next blog, we will discuss how to handle a cold approach from buyers.

For advice on selling your business, contact our team today.