5 Ways to Determine When to Explore Your Business Exit Options
As an entrepreneur, it will one day be time to think about your business exit strategy. But how do you know when this point is? Here are five key questions you can ask yourself to determine if you are ready to start planning your exit.
1. What Is The Performance Rate Of The Business?
In general, an excellent time to sell your business is when it’s performing well and possesses a bright future. Selling at this point will guarantee a high valuation and sell for more money; also, if the business is struggling, it even a good time to put the business up for sale. You need to assess your business's health, take into account the state of the market in your industry, and decide when to do so. Remember that it takes time to sell a business, so you will have to think about the time factor when making your decision.
2. How Invested Are You?
As you know, operating a business takes a lot of work and dedication, which can sometimes lead to feelings of exhaustion. Honestly, ask yourself how much of your passion still exists. Are you ready to continue investing in the business? Are you still determined to help yourself grow? Is your level of commitment necessary for the company's best interests, or are you starting to feel unprotected? Be pragmatic that sometimes a change of ownership can be precisely what the business needs to take to the next level. This may require checking your emotions at the door and accepting the idea that you have to release it if you like something.
3. Are Buyers Already Interested?
Some businesses are always on demand and can be contacted by buyers, even if the owner is not interested in selling. And sometimes, your business can meet a specific need of a buyer, such as a competitor. Maybe you didn't think you were ready to sell. But if people are listening, it may be worth considering an acquisition. Businesses that have experienced substantial growth in recent years will sell faster and for more money. It may be the right time, and you haven't noticed. Or maybe even a merger could be good for the company and the profits. Some transactions can be arranged to maintain a slot in the business. You don’t have to be active about the business daily, giving you a retirement head start without having to go into it entirely when you're not ready.
4. What Is Your Financial State?
If you intend to retire completely after exit, you must have sufficient financial capacity to maintain your current lifestyle, live a little longer, or be prepared to shrink a little. Because the timing of a commercial sale is critical, you will need to consider how to take advantage of the right time to get the most value and make it a strong selling point. Your financial situation is essential even if you plan to invest or start another business. Can you afford it? How does selling your existing business contribute to your financial situation to make it possible? Again, taking advantage of time and the maximum value is vital.
5. Have You Ever Spoken To An Expert?
Are you having trouble answering some of these questions? Talking to an exit-planning expert, such as an M&A consultant, can help you understand things. You probably need help developing your business, or you may not know what your options are. Or maybe you need help obtaining market information at the time of sale. Contact the award-winning H&S team to start the conversation. Whether you want to dip a foot in the retirement pool or you’re ready to immerse yourself in a sale fully, we can offer valuable and even insightful ideas, as well as compassion and an understanding of the emotion of the exit planning process.
"Now what?": the answer to the question is quite simple, contact us.
Our experience M&A analysts await your call to discuss how H&S Business Broker can help you sell your business at full value. Get in touch now, and let us begin this exciting journey together.