The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try. Once you find something you love to do, be the best at doing it.

Rachel Morgan, Author

Is the right time to sell you company?

After spending years building your business, you’ve started to think about a transition. Maybe you’ve been planning a business sale as part of your exit strategy since the beginning, or maybe a recent merger or acquisition in your industry or region sparked the idea. Perhaps you simply woke up one day and realized you were done running your company.

Whatever inspired you to consider selling your business, what matters next is timing. To maximize your purchase price and minimize frustration and effort, you’ll need to carefully identify the optimal window for your exit. You’ll need to look out for certain signs, because while every liquidity event is unique, a few general timing factors almost always apply.

Is Your Company Ready to Sell?

  • What is my business truly worth?
  • What is my asking price?
  • Can I justify it?
  • What changes can I make now to increase the value of the business?
  • Would my business continue being successful without me?
  • What do the company’s stakeholders stand to gain and/or lose from a sale?
  • Do I have a transition team in place?

I make a conscious effort to keep things in perspective when I get burned out. It is easy to get stuck in the daily grind, but if you think about all the distance you have covered, and what lies ahead, it is much easier to feel motivated and optimistic.

Alex Litoff, Event Farm

Like the stock market, the M&A landscape waxes and wanes in concert with larger economic forces, sometimes in your favor. Look at your competitors and similar-sized companies in your sector:

How many have been sold or acquired over the last few years?
How many are acquiring smaller companies?

The same trends that make your business an attractive prospect to a buyer may also compel you to sell as quickly as possible, before market forces move in the other direction. If you run a startup, for instance, you may want to exit before the next wave of disruption emerges.

  • High rates of recent transactions closed.
  • High recent purchase price multiples.
  • Low taxes.
  • Low interest rates.
  • A strong economy.
  • Cheap debt financing.

How are you feeling about an exit? Do you arrive at work each day excited to tackle new challenges or are you feeling irritable, worn out, and dispirited? Does the job still motivate you, or have you lost touch with your skills and interests? Can you imagine running your business for another five, 10, or 20 years? Feelings of burnout may indicate that now is the time to sell your company. Keep in mind, however, that you’ll need to muster up the energy to communicate and negotiate with your buyer—while continuing your day-to-day work—for at least several months. And depending on the structure of the deal, you may need to remain involved (e.g. as a consultant) for a period after the transaction has closed.

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