The optimal time to sell is when the trajectory of your revenues and profits are going up. You want to sell when existing and new clients are banging down your door to buy your goods or services. Many owners rationalize not selling “at this time” because they are making money and writing off expenses to the business. If you wait until your revenues and or profits flatten out or decline you will not attract premium buyers or get the highest valuation. Timing is key in selling your business for the optimal value: you may want to retire, transition to a new venture or just rest after years of building your business. Think strategically not operationally when you are ready to sell; your business broker will work with you on positioning and pricing to reap the rewards of your labor.
“Selling at “peak value” is, of course, easier said than done. Most business owners will find it hard to consider selling when things are going well, but that could be precisely the best time to get out. A growing, expanding, smoothly running business will be most likely to attract multiple buyers, creating an auction-like atmosphere that will often lead to a high selling price. Too many owners wait until a major customer or key employee is already lost before trying to get out as well. Buyers will be aware of these types of situations and may use it against you in the negotiation process. The key to getting the most money is selling when the buyer can find few flaws.”
By Mike Handelsman, General Manager, BizBuySell