If you are a business owner, you wouldn’t be human if you didn’t have thoughts about packing it all in from time to time, selling up and living happily with the proceeds. Or, perhaps, using the capital to fund a brand new venture.
It is right that you do have such thoughts. Nothing lasts forever, and in business as in life, you should always be open to new opportunities, to the possibility of change. The key is to always be in control of the terms. If you do end up selling your stake in your business, you don’t want it to be because you have no other choice. You will end up getting nothing like what you hoped for. You want to sell when the time is right, when you stand to make the highest amount possible and when it suits you personally.
So if you are asking “is this the right time?” what exactly should you be weighing up?
Business and personal
The first thing you need to do is separate business from personal considerations. We will deal with the latter first because, to put it simply, if you are not ready to sell emotionally and mentally, then it doesn’t really matter how good a deal you might get. Your personal fulfilment and satisfaction will be better served staying at the helm than taking the money.
Start off by asking yourself the following questions:
- Are you serious about the possibility of selling, or is it just whimsical speculation?
- What are your reasons for wanting to sell? Have you started to feel unfulfilled or tired of it all? Have you got itchy feet? Have you got other ambitions, personal or business? Are you ready for retirement?
- What do you hope to achieve by selling up? What are your goals, financially and otherwise, for your family?
- What are your plans after you get out?
- Finally, what does your gut tell you?
If, after giving all of these due consideration, you conclude that the time is right for you to make your exit, then you can move onto business considerations. In an ideal world, you want to sell when three factors align – your business is performing well, your future financial forecasts are strong, and you have concrete interest from parties who sound like they will be prepared to pay exactly what you ask.
In the real world, of course, you might sooner wait for your lucky stars to align as get all of these entirely in your favour. But what you don’t want to do is make a decision to sell when the business is at its lowest ebb, when performance and forecasts are poor. Even if your did find a buyer (which you might be hard pressed to do), you would certainly not get a decent price for it, and you could end up wasting frustrating and stressful months in a fruitless search.
If you are determined it is time to go and your business is not in the best shape, it is well worth making one final last effort to improve the books, boost output and turnover, cut costs – basically anything that will make the business a more attractive proposition to a buyer. You are far more likely to get your wish that way, and to leave with your head held high and a decent sum in your bank account.