The right time to sell a business is often one of the most difficult decisions a business owner must make.
I believe the decision to sell should be based on two key points:
- Current performance of a business
- Current passion & energy levels of the owner
I will address performance of business first.
Performance of business
When a potential purchaser is assessing your business and is deciding which to buy and what to offer, they will focus on your most recent financials and zero in on the current profit. Importantly, if you are considering selling and want to maximize your return, aim to sell when your profit & loss statements are either consistent or trending upwards where possible. Falling sales and decreasing profits will make buyers cautious and either turn them away or prompt them to make low offers.
Passion & energy levels of the owner
I am sure we have all experienced bad service, when staff or owners do not greet customers with a smile, or, you feel that you are disturbing them if you have a question. If you or your staff are behaving in this manner and a holiday doesn't help, then it is definitely time to consider your exit strategy. Once your business begins to suffer because you're no longer passionate about it or servicing your clients, it won’t take long and your net profit will start to suffer. In turn, this will significantly reduce what you can sell your business for.
If you're considering selling and would like to find out what the next steps are - get in touch and we'll assist you with your inquiries.