When to Sell?

Everyone has problems.  As a business Owner, here’s one that you might want to have.

John Warrillow, author of “The Sellability Score” brings up an excellent point in his article entitled “The Downside of Selling High.”

Link to Article:  http://bit.ly/1pHqQpP

The point is being wary about selling your business at the height of the market when the market is paying the highest multiples.

I advise my clients that there are 3 components to determine when is the best time to sell their business to achieve the highest price.

1) When the market is ready

2) When the business is ready

3) When the Owner is ready

Of course, when the “Owner is ready” usually trumps the other two.  But, always operating the business at high levels of profitability will ensure that when the market is ready (i.e., delivering high multiples) and the business owner is ready, then the business can be sold for the highest price.

Exceptions always exist.  Such as making multi-million dollar investments for the future may mean it’s better to wait until the next up-tick in the business cycle.  And these exceptions are one of the reasons to begin a conversation with transaction intermediaries (like myself and others) who help business owners weigh the various factors over the years to best coordinate the business life cycle, the market life cycle and the Owner’s personal life cycle.