Strike While the Iron is Hot: Deciding When to Sell Your Business
Choosing to sell your business is a monumental decision. You’ve put countless hours into your business, doing everything you can to maximise your company worth and growth. You’ve made sacrifices and toiled through birthdays, holidays, late nights and early mornings to turn your dream into a reality. You want to get the most you can out of the sale of your business—but how do you know when the time is right? Here are the top four factors to consider when figuring out the best time to sell your company.
Your Personal Life
The first thing you must think about in this process is perhaps the most apparent: you. Are you feeling burnt out on business? Are you uninspired and ready to pursue something new? If you feel you’ve lost your spark, it could be a good time to sell.
You’ve also got to evaluate your personal and financial situations. Do you have an emotional support system—family and friends—who can help you through the stress of the sale and the transition to your next chapter?
Do you have the financial means to make ends meet no matter the outcome of the sale? The salary that you pay yourself or the dividend that you take each year will often stop immediately or soon after a sale. Will a lump sum be enough to offset this adjustment?
Reflect on these questions and be truthful with yourself. You want to ensure that you won’t be struggling emotionally or financially if you put your business on the market.
The Value of Your Business
Determining the value of a company can be difficult, especially when you are deeply connected to it. Turn to Pomanda’s business valuation calculator for a free and accurate valuation in minutes. We get your figures direct from Companies House, so you don’t need to have any paperwork or numbers on hand, and we run independently of any third party. We’re here to give you the unbiased valuation you need when you’re deciding to sell.
Once you have this valuation, you’ll need to size up your options. Is your company worth much less than you anticipated? You can get out straight away by selling for a low price, or you can continue building it and adjusting your business model to focus on those areas that will return your profits for an eventual sale.
Your Professional Team
Think about your employees. Are you struggling to find people to help you achieve your vision, or do you have a solid team that could run things smoothly through the handover to a new owner? A great group of employees will help your business thrive after its sale and could increase your company’s worth.
Your Company’s Appeal
Is the concept behind your business one that entices investors and potential buyers? Is the current atmosphere in your industry conducive to its success? Consider whether buyers will see your company as a hot commodity—this will maximise your profits. Conversely, a thriving market for your business may convince you to hold off on the sale, since you’ll still be able to reap the benefits.
The path you take in the sale of your company will ultimately depend on a number of inextricably linked factors. You must consider the impact this decision will have on every aspect of your future. However, there’s never a wrong time to start thinking about selling—preparation will set you up for success when the time is right.