When is the Right Time to Sell Your Business?

Did you start your business to operate in perpetuity? Or did you start a business with the intention of selling it for maximum value and profit once it became successful? All entrepreneurs should have an exit plan when they start their business. Whether you intend to sell or must sell your business, there is always a right time to do it.

Starting a business can be compared to buying stock from the stock market. But rather than looking at historical profit trends and future potential that is in the charge of others, you are in full control of your business and its profit potential. By increasing sales, making operations more efficient, and developing the right procedures, you can increase the value of your business and make it an attractive investment for others.

Factors that Influence the Timing of the Sale

When is the right time to sell? If your exit plan involves selling your business, then you have various influences that can affect the value of your business, such as:

  • The profit and growth potential you have created
  • Economic factors that could limit or increase the value of your business
  • The number of potential buyers in a market

Remember, you can only control the first point. All other economic and market demand factors are out of your control. Thus, you must determine whether your exit plan is ready to execute or whether to wait.

Considering the Market Conditions

For instance, say you started a business in 2003 with an exit plan to sell in 5 years. However, based on a poor economic climate in 2008, your exit plan may not be at its full potential because you cannot sell for your full asking price. You have the option of selling at a lower price and not reaping your small business’s full value or waiting until economic factors are once again in a positive light.

Remember this: when preparation meets opportunity, this is the right time to sell. Whether you have an exit plan or an interested party approaches you to buy your business, you must be prepared with a plan to sell if the time is right for you.

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