Time to Reveiw re-sizedIn a perfect world, the best time to sell is when everything in the business is running like a fine-tuned engine, sales are growing, the business owner is still enthusiastic about the business, and its future prospects look promising. This, however, is not when some business owners considering selling. The following are points at which you might want to start the process of thinking about selling:

  • Sales have been growing, but have started to plateau. It will take a substantial investment in equipment, working capital, staffing, advertising, or effort to take the business to the next level, and you, as the owner, just don’t have it in you to make the various investments required.
  • Sales are growing or are flat in relation to normal business cycles. When sales start to decline, buyers and lenders become concerned about the unknown future. In fact, for a buyer to secure long-term financing, sales must be at least flat or—better yet—growing for more than the previous three months. It becomes challenging for a buyer to get bank financing when sales have been declining as a trend. The issue is when the current trend will end.
  • The owner of a business has become a manager rather than an entrepreneur, and the business is no longer fun. What normally follows from this point is a gradual decline in sales, profits, and business value.
  • As may be obvious—interest rates are low, bank financing is generally available, and there is improving optimism about the economy in general.
  • Health, physical stamina, or family issues start to take away from focusing on the business, and that trend is likely to continue.

When it is time to sell, take the current year to clean up the financial health of the business—get all records in order, and do everything that can be done to maximize profit and minimize the owner’s non-business–related expenses from being charged to the business.

For a free confidential consultation, please call me or view my LinkedIn profile at www.LinkedIn.com/in/dolansales.

Dolan Sales, Inc. is a Lower Mid-Market Business Broker and Intermediary, serving customers nationwide.