There is rarely a perfect time to sell a business.
For most owners, the decision is a combination of personal circumstances, business performance and what is happening in the market.
You may have spent years building the company and want to realise some of that value. You might be considering retirement, looking for a new challenge or simply feel the business needs a different owner to take it through its next stage of growth.
Whatever the reason, one of the most useful things you can do is start thinking about a potential sale before you actually need to sell.
Is the business performing well?
It can feel counterintuitive to sell when things are going well.
In reality, that can be exactly when a business is most attractive.
Buyers are generally more interested in a business that can demonstrate good financial performance, consistent growth and a credible opportunity to continue growing.
If revenue has been increasing, margins are healthy and the outlook is positive, you are giving potential buyers a much stronger story than if you wait until performance starts to decline.
A common mistake is assuming you should wait until the business has reached its absolute peak. The difficulty is that you rarely know you’ve reached the peak until you’ve passed it.
Is there still growth left for the next owner?
A buyer isn’t only purchasing what the business has achieved. They’re interested in what it could do next.
That makes the timing of a sale important.
If you’ve already exhausted every obvious growth opportunity, the buyer has to work harder to see where their future return will come from.
A business can be particularly attractive when it has a strong track record but still has identifiable opportunities ahead - perhaps expansion into new locations, additional services, new customer groups or further investment in sales and marketing.
You don’t necessarily need to deliver all of that growth yourself.
Sometimes leaving something on the table for the next owner can make the opportunity more compelling.
How dependent is the business on you?
Ask yourself a fairly simple question:
What would happen if I didn’t come into work for three months?
If the answer is that the business would continue operating relatively normally, you’re likely to be in a stronger position for a sale.
If customers would immediately start calling you, important decisions couldn’t be made and key relationships would suffer, there may be some work to do first.
For many owner-managed businesses, reducing dependence on the founder is one of the most valuable things that can be done before a sale.
That might mean strengthening the management team, transferring customer relationships, documenting processes or giving other people greater responsibility.
Are you personally ready to sell?
The financial side of selling a business gets most of the attention, but this question matters just as much.
Building a company can become a significant part of your identity and day-to-day life. Selling it can therefore be a bigger adjustment than owners initially expect.
Think about what you actually want after a transaction.
Do you want to leave immediately? Stay involved for a period? Retain some equity? Start another business? Retire?
Being clear about this before entering a sale process makes it much easier to judge whether a particular buyer and deal structure are right for you.
What is happening in your market?
The wider market can influence both buyer appetite and valuation.
Certain sectors may attract significant interest at particular times. Financing conditions can change. Strategic buyers may enter a market, while private equity investors may become particularly active in certain industries.
You can’t perfectly time the market, and trying to do so can mean waiting indefinitely.
But understanding whether buyers are actively looking for businesses like yours is useful when deciding whether to explore a sale.
Should you wait another year?
Maybe - but there should be a reason.
If another 12 months could allow you to win an important contract, strengthen the management team, reduce customer concentration or demonstrate another year of strong growth, waiting may materially improve the business.
If the plan is simply to wait because the business might be worth more next year, that’s a different decision.
There will always be another target to hit.
The more useful question is whether waiting is likely to change the quality or value of the business enough to justify the additional time and risk.
So, when is the best time to sell?
For many owners, the right time is when three things come together:
The business is performing well.
There is still a compelling opportunity ahead for a buyer.
You are personally ready for what comes next.
You don’t need to wait until you’ve made a final decision before exploring the market.
Understanding who might be interested in your business, what buyers are looking for and how your company could be positioned can help you decide whether now is the right time - or whether there are things worth doing first.
Considering a sale?
The Brokerage connects business owners with buyers and investors looking for acquisition opportunities.
Create a business profile, control the information you disclose and start exploring potential interest in your business.