Knowing when is the right time to sell a business can be a surprisingly difficult thing to figure out. There are all sorts of issues that come into question, and you’ll rarely be presented with a clear, black-and-white answer.
As a director, however, there will likely be signs that can help guide you one way or another. From branding issues to succession problems, these are just a few of the main signs that it’s time to sell a business.
You’re unable to keep the brand exciting
If you have a business that’s been successful in the past, but you’re just not quite managing to refresh the brand and keep it relevant, then it could be time to move on, this could be a difficult decision to make, but one has to be able to ensure that they know when to call it a day. You could potentially navigate this with the help of a new marketing team, but ultimately, the business might just need new direction.
In most cases, it’s best to do this sooner rather than later because if you leave it to the last, recovering from the situation you are in might get harder and more challenging. Try to sell while your business is still doing relatively well, rather than waiting until you’re at a stage where you need to sell. Not only will this be less stressful, but it’ll also leave you in a better bargaining position. This is something you have to keep in mind if you want to cash in on the true value that you think your business is worth.
You’re unable or unwilling to focus on the business
Another sign it could be time to sell is if you and the other main directors are unable or unwilling to really focus on the business, which could be due to various factors. That could be due to anything, from personal issues to simply wanting to move on to new projects. The moment you are faced with such an issue; it is time to move on as managing the business will become a really difficult task in such a situation.
If your heart and attention are no longer in it, then it’s worth engaging the services of a business broker like Dexterity Partners and organizing the sale, so as to strike a deal that makes it worth your while to exit a business into which you have put in a lot of your time and effort. Pass it on to a team who actually cares about what the business is doing, and who can do justice to the business, now that you are no longer able to do so.
The market is doing well
If the market is thriving and performing far better than expected, then it could be a sign to make the most of a good opportunity as such an opportunity might rarely come along once again. This could especially apply if you’ve been in the game for years and predict that things will get worse from here, and that now’s a lucky time to get out.
Don’t rush the sale, and try to get the opinion of others in the niche – there’s a difference between choosing a smart exit point and blundering your way out of stable market growth. Hence, a lot of thought and contemplation should ideally go into such a decision, so that you are left with no regrets at a later date.
Succession issues
Lastly, if you’re struggling to work out who will take on the business after you and the directors are done, it could be time to consider selling. Passing on a business is a far more complex process than other, simpler assets like stocks or property, and it’s worth thinking about the implications of putting it into incapable hands.
In these situations, selling can help to ensure that you liquidate your legacy before it’s too late, while also leaving the business in competent hands of those who can manage things well and take it into the future.
Almost every person who puts their blood and sweat into building a successful business, wishes that their legacy is carried forward and that their business only moves from to strength to strength even after they are long gone. Which is why, taking a decision on succession in a strategic and a logical fashion rather than a decision based purely on emotions, is a very important step in the right direction.
Ultimately, however many indicators there might be that it’s time to sell, it’s a decision that you and the directors will have to make on your own. Take your time, and make sure that you navigate the sales process as smartly as possible. And most importantly, don’t shy away from employing a competent business broker who can show you the right direction.
