World Class Mergers & Acquisitions  |  For Companies $5 Million to $100 Million in Revenue

When Is The Best Time to Sell Your Business?

This is the time of year when many business owners begin to think seriously about selling their business, and a question I am frequently asked is “When is the best time to sell my business?”

In my experience, the very best time to sell your business is when you DON’T have to.

From a buyer’s perspective, picking the best business to buy is a little bit like picking the best stock to invest in: the most attractive businesses to buy – and therefore the ones that will command the highest prices – are those that show consistent improvement in sales and earnings, and have the expectation that next year’s sales and earnings will be even better.

From a bank’s perspective, these are also the most attractive businesses to finance.

Conversely, a business that has shown an inconsistent pattern of sales and earnings, with some very good years and some not-so-good years, will command a more conservative valuation, while a business that seems to be in decline, with this year’s sales and earnings below last year’s and with the expectation that next year’s sales may be lower still, will be very difficult – and perhaps impossible – to sell or finance.

As we’ve discussed in earlier editions of this newsletter, one of the biggest mistakes business owners make is waiting to long to sell their business.  Since the process of selling any business can take up to a year or even longer, it’s a good idea to start planning 2-3 years in advance to prepare your business for sale, and selecting an experienced M&A professional to assist in the process.

If you know of a business owner who’s thinking of selling or buying a business and who might benefit from a complimentary consultation with us, have them contact me, or any of the M&A professionals at www.bradwaygroup.com

By: Mike Ertel, Transworld M&A Advisors