Is Now The Right Time To Sell Your Business? The Three Questions You Must Ask If You Want To Sell For Top Dollar

It seems almost to be conventional wisdom that you should work hard at your business until retirement age, 65.

This is patently ridiculous.

What is it about your 65th birthday that is magically going to create the opportune moment to sell your business?

By following this narrow-minded traditional plan, you run the risk of missing the perfect window at which your business could go for the optimum price making your retirement all the sweeter.

Why run a risk like this?

The statistics are shocking:

  • 75% of businesses advertised or listed NEVER SELL at all!
  • Of the 25% that do sell, only 1% sell for the maximum price
  • 99% of all sellers unwittingly leave money behind

In short, the overwhelming majority of business owners who succeeded at creating and building businesses fail miserably at maximizing their exit.

Do not let this happen to YOU!

A way to avoid making these mistakes is to ask these three critical questions to establish whether now is the right time to sell your business for the best price:

1 – Macro

What is going on in the wider economy – locally, regionally, nationally…even internationally?

Is it growing or stagnating? Is it just hanging in there or are we in a recession?

Obviously, a growing economy is great news.

If there is a recession, like we have recently experienced, you can still sell your business for the maximum price but it is more difficult.

It pays to pay attention to the world around you.

2 – Your Industry

The second timing element is in your industry.

What is going on in your industry, in your market sector?

Is it growing? Declining? What are the common issues?

Pay attention to warning signs such as talk of new legislation or regulation that will affect your industry.

In my case, regulation had been an issue in the assisted living business for the last decade. Each week, a new piece of regulation would come out. I stayed up to date on what was happening in this regard so I could make sure we would stay well ahead of both our competitors and the regulators with our systems and processes.

A business rendered outdated by not following regulation or other market changes is just as bad as a business rendered outdated by a careless, incompetent owner. The end result is the same.

3 – Your Company

Your company is the third timing element.

What is going on in your company?

Is the business growing? If you have historic growth and the growth is continuing, this represents a wonderful opportunity.

On the flip side, if your business is static, stagnating or going backwards and struggling, you need to be aware of these facts. It does not mean you cannot sell. Preparation is even more critical in this case because you need to sell and you need to create a compelling story about why you are selling.

You can hit the jackpot when you have plus marks next to each of these three elements. Strong economy, growing industry and established company with a history of success.

This does not mean that your exit cannot be maximized if one or more elements do not get a plus mark but you have to prepare for it well ahead of time.

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