Written by Bob Yuran for Deith Realty
I recently met with the owner of a small company here in South Florida who was thinking about selling his business. His business was performing terrifically. In fact, the best it had in many years. He asked my advice as to whether it would be best for him sell it now, when his business is thriving, or wait and secure a better price down the road.
Many business owners are so conflicted. They’re ready to move on, but can’t bring themselves to pull the trigger when their businesses are doing well. What these folks often don’t understand is that by delaying the decision to sell, they can face significant risk. Even small changes in interest rates, economic growth or multiple other factors can have a negative impact on the value of a business. For instance, owners may find that competition increases faster than they can keep pace. Or, new technologies require them to raise capital to keep processes and systems up-to-date. Moreover, if they are simply burned-out, they likely will be too exhausted and overwhelmed to maintain the passion necessary to keep their business competitive.
In my experience, the best time to sell your business is almost always when you are at the top of your game -- with robust and growing sales, healthy cash flow, and a squeaky-clean balance sheet. When you think your business is at or near its peak and/or you have lost the passion to lead it effectively, it is high time to strongly consider selling and moving on with the rest of your life.