Sat Jul 22, 2023
As a boomer age business owner, selling or transitioning your company is likely top of mind. The story you're telling yourself and your trusted advisors may sound like this: "I know I have to do something ... it's so much work...timing isn't right...my children will take over...l have a partner" etc.
Your future, and the well being of many other people, depends on the steps you take over the next few years. You know you need to do something now or it might be too late. Protecting what you have built and positioning for the future are the priorities. The clock is ticking, ready or not.
The most asked questions we get are should I sell my business and when is it time to sell your business? Followed by how long does it take to sell a business and what is the process of selling a business?
When it comes to selling your business. If you don't move forward, the decision will be made for you. The time it takes to sell a business can be influenced by its size, complexity, and the demand within the market. Properly executing the steps involved in selling a business is vital. This includes conducting a comprehensive valuation, preparing financial documents, and engaging with potential buyers effectively. Determining the appropriate selling price relies on a thorough business valuation process, which considers financial performance, assets, and market comparables. Professional guidance from business brokers, investment bankers, or M&A advisors can streamline the process and ensure a fair transaction.
Case 1 - Business relies heavily on importing custom product from China. Sales are totally based on travel and tourist industry. I wonder if the recent events will impact this company and its' chances for success in a sale.
Case 2 - Owner never made it to our second meeting. Went from healthy and excited about the future of his transition the first time we met to one week later no longer able to work. Potential sale of the company is not really viable.
Case 3 - Successful small distribution company has afforded the Owner a nice lifestyle. Unfortunately it is too small for anyone to be interested in buying and revolves too much around the Owner. Owners plan is to wait until they're ready to sell and then grow it and remove themselves from a central role. Good luck!
Case 4 - While contemplating the eventual sale of the business over the past several years the Owner is now faced with a government expropriation of his building and business. Unfortunately the government works in mysterious ways and will move ahead when they feel like it and at their convenience. Oh and the government will pay what they think is reasonable for the business. So living and running a business in limbo and no definitive idea of how much the Owner will be compensated or how long it will take is not pleasant.
Health, the economy, competition or industry changes will dictate what happens next. At that point all bets are off. You've lost control and you didn't get into your own business just so you could give up control.
Don't fall into the unrealistic timing trap. How long does it take to sell a business? A crucial determinant of the time it takes to sell a business is the realistic and accurate valuation of the company. A well-prepared business valuation can attract potential buyers and expedite the selling process.It will likely take 3-5 years from start to finish to be fully out of the business. You need to find a buyer, do the deal and then transition.
Sometimes it can be done in less time if the circumstances require but typically it is a longer term proposition. At this point you don't know and it would be wise to prepare for the worst.
Right now you may not know exactly what you'll do after the business is sold. It's ok, that's part of the journey. You didn't have all the answers when you started or took over the company either.
Likely 80% of your wealth is tied up in your single largest asset - the business. Most owners tend to have inflated opinions on the value of their company. Wouldn't it be more prudent to find out the real story. You will need a trusted business advisor for business value consulting services.
How much do I sell my business for? Take your first step today and see what your business might be worth. And more importantly find out what you have to do to get it. What is the market value of a company in my industry?
Deciding when to sell your business is a complex decision that depends on various factors. While I can provide you with some general considerations, it's important to note that individual circumstances may differ. Here are a few factors to keep in mind when deciding whether to wait to sell your business:
Business Performance: Evaluate your business's current and projected financial performance. If your business is experiencing consistent growth and has a positive outlook, it might be advantageous to wait until its value increases further. On the other hand, if your business is struggling or facing challenges, you might consider selling sooner to avoid further losses. Seek a business value consulting or family business coaching and consulting trusted business advisor to accurately calculate value of a company for an honest market value of a company.
Market Conditions: Assess the overall market conditions and industry trends. If your industry is thriving and there is high demand for businesses like yours, it might be a good time to sell. Conversely, if market conditions are unfavorable or uncertain, you might want to wait for a more opportune time. It’s all about the market value of a company. When contemplating selling a business to a competitor, understanding the fair market value becomes crucial. It is essential to negotiate favorable terms that reflect the business's worth while considering market dynamics and competitive advantages. However, deciding whether to sell a business at all involves careful evaluation of various factors. Market conditions, personal goals, and the business valuation itself must all be considered before making a final decision.
Personal Goals and Timing: Consider your personal goals and timing. Are you ready to move on to other ventures or retire? If so, it might make sense to sell now rather than wait. Additionally, if you anticipate significant changes in your personal life or external factors that may impact your business, it could influence your decision to sell sooner.
Competitive Landscape: Analyze the competitive landscape and the potential for increased competition in the future. If you anticipate intensifying competition that might negatively affect your business's prospects, selling earlier could be a wise decision. Ask a family business coaching and consulting sale advisor, or your trusted business advisor how to sell your business to a competitor.
Valuation and Offers: Keep an eye on the market and assess potential offers or indications of interest from potential buyers. If you receive a compelling offer that aligns with your valuation expectations, it might be worth considering selling. Talk to your business value consulting, sale advisor for tips for selling a business.
Legal and Regulatory Factors: Stay informed about any upcoming changes in regulations or legal factors that might affect the sale process or your business's value. These factors could influence your decision to sell sooner or later. Again find a trusted business advisor with expertise in these areas. Engaging experienced professionals, such as business brokers, investment bankers, or M&A advisors, can streamline the selling process and reduce the time it takes to sell a business. These experts can assist in business valuation, market research, and connecting with potential buyers, facilitating a smoother transaction.
Ultimately, the decision to wait or sell your business depends on a careful assessment of these factors and a consideration of your personal circumstances and goals. It may also be beneficial to consult with a sale advisor, a business broker or someone specializing in M&A Consulting who can provide expert guidance tailored to your specific situation. Selling a business is a process that can vary in duration and complexity. Numerous factors come into play, including business valuation, market conditions, and industry dynamics. Mergers and acquisitions (M&A) consulting services can provide invaluable guidance throughout the selling process, offering expertise in strategic decision-making and business valuation. To ensure a successful transaction, conducting thorough due diligence is essential. An M&A Due Diligence Checklist helps examine a company's financial, legal, and operational aspects, facilitating accurate valuation and mitigating potential risks.
As a trusted business advisor and sale advisor I appreciate the opportunity to share my years of experience working with Owners just like you. In fact you may want to consider our online program Sell Your Business 4 More. Click on the Eric Gilboord Coach cap above.
A Toronto-based seller of businesses. Loves talking to first time business Sellers about transitioning themselves and their company.