Choosing to sell your business is not a decision that most entrepreneurs take lightly. Chances are, you created a product or service you are passionate about and fought hard to make it happen – from pitching to professional investors and possibly even pleading with family and friends to take the risk with you. Plus, you probably have employees who count on you for their own livelihoods. It is enough to make your head spin. Even with all these difficulties, however, sometimes the time comes to move on.
In some cases, you may consider selling your business because someone approached you directly with an interest in purchasing your company. Other times, you might just be contemplating whether or not it is the right move for you personally as a leader and owner. At The Hatteras Group, we have worked with business owners in a variety of situations to determine the best time for them to sell. Here are some of the most important lessons we have learned from this experience that could mean that NOW is the right time to sell your business.
Business is Booming
You may assume that when your company is doing well, it is the time to keep going, pushing yourself to the limit. In reality, this can be one of the best times to sell your business. It is during these times that your company appears to be most valuable to potential buyers. They can see the demand that consumers have for your product or service and envision how they could profit from owning your business. Navigating these offers can be particularly challenging as you have to balance your confidence in your company with its actual valuation at the time of negotiation.
A Market Turn
If you sense that the market may be turning towards a new trend that would threaten to make your business irrelevant, it may be time to think about an exit strategy. While you always have the option to try and pivot your company to accommodate this change in demand, it could end up being a costly failure that leaves you in worse shape than before.
Recognizing that your business model may not be able to withstand a new trend in the market can be tough to stomach, but dealing with it before it drastically impacts your business can help ensure you receive the best offer possible. There are always other entrepreneurs looking to disrupt industries, so even if you’re lucky enough to see the change coming, you may have a very short window to take action.
Your Company Outgrew You
It is hard for all of us to admit, but sometimes we outgrow things or they outgrow us. Running a business is no different. If you constantly feel like your head is underwater and you don’t know how best to help your company or employees succeed, it might be best to step aside and let someone with more experience run things. Alternatively, if you feel like you have done what you can for your existing company and would like to pursue a new challenge or opportunity, there is no shame in finding a buyer to take over.
There is An Opportunity
There is never a better time to consider selling your company than when someone is standing at your door with an offer in hand. If the market is in your favor or you are a disruptor that seems to be hitting a need in the industry, it will attract the attention of larger organizations. These companies will likely be able to make you an offer that is well above the actual value of your company, but they see the potential and want to eliminate the chance that you become a future competitor. Lucrative offers like this should be thoroughly considered.
The Hatteras Group Can Help
The Hatteras Group is a collaborative team of professional intermediaries and advisors that guide business owners and entrepreneurs as they navigate the complex process of mergers or acquisitions across a variety of industries. Generally, we work with those companies whose annual revenues are $5MM to $100MM.
If you are trying to sell your business, we can help you determine the value and audit the health of your company with an advanced 10-point evaluation checklist to evaluate if there are any issues that could potentially derail a sale. Our team can also provide advice on how to address any concerns that we find. Contact us today for more information.