The easy answer? When you don’t need to!
Many owners don’t consider selling their businesses when everything is running fantastic because that’s when all the hard work is starting to pay off, but this is the exact same reason why your business will be most attractive to a potential buyer.
Business sale prices are dynamic and investor confidence is impacted by many outside factors that you can not control such as the economy, trends, competition, and geopolitical considerations. A business and industry that are in demand and has predictable and growing cash flow are key factors that buyers are looking for and will add attractiveness and additional value when negotiating a sale.
Most owners do not strategically plan business sale value maximization and buyer attractiveness. Also, owners often wait too long, until they are tired or distracted and the company is starting to show signs of decline. Many owners start to enjoy the benefits of their efforts and are not as motivated to keep up the drive and pace their business needs to continue thriving.
Business results will start to show the results of your early retirement mindset! Unless you have been able to bring in strong management to replace you, your company will likely start declining when you start slowing down.
New ownership or partners can support the continued growth of the business, with new energy, capital and strategic direction.
Lastly, when you sell your business, you are often required to continue being involved in the business for a transition period of one to three years. This is a major timing issue that needs to be factored into when you sell your business.
So consider selling when your company is operating optimally, for a higher price, allowing a faster sale process, and a more positive sale experience!
Information for this post was sourced from Certified Business Brokers.