When is the Right Time to Sell My Business?
No one can advise you as to when the right time is to sell your business – it is a personal decision and it is up to you and your family. Of course, there are many external factors that should be taken into consideration, but overall, it is primarily up to you – the owner.
Back in 2008 we had a 65 year-old business owner who wanted to sell his business. Unfortunately, at about the same time was when the recession hit. He realized most of his net worth was tied up into his business and desperately wanted to retire.
It took him more than five years to turn his business around and grow revenues to where he was before the recession. A typical buyer is looking for 3 years of good tax returns/good solid earnings. Now at the age of 73 years old, his business was in good shape and he didn’t want to wait any longer in case another recession hit (which is usually every 8-10 years). Other factors that can affect the salability of your company are:
- The price of the business – is it valued correctly?
- Interest rates – If interest rates are low, buyers can afford to pay more for a business.
- Unemployment – If high unemployment, there is usually a large volume of qualified buyers actively looking for a business.
- Stock market – If the stock market is good, buyers have more to put down as a down payment on a company.
- World events – Buyers and sellers tend to be more cautious if there are many events going on in the world.
Since the business was now in a good position to sell, the Benjamin Ross Group was able to sell his business in a relatively short amount of time, and our client is now enjoying retirement!