It a tough question that comes with more disclaimers than I can fit into an article that is short enough to hold your attention. So, we’ll skip the qualifiers and get right to the basics.
Timing the market always comes with a certain element of risk. Managing the various risk factors is critical in achieving the appropriate value in selling your company and in attempting to ensure that the transition has the desired positive impact on your life. In considering the timing of selling all or part of your company, you must consider both the money and life sides of the equation.
The Money Side
A list of indicators that the timing is right for the sale of your business, from the perspective of achieving maximum monetary value, would include:
- The company is healthy, profitable and has posted 3 years or more of profitable growth
- The outlook for your company, industry and end-user markets is positive from a macro and micro perspective
- You can relatively easily identify clear growth channels for your company and you believe your company is poised to capitalize on those opportunities
- Acquirers or investors are active in the space
The Life Side
The life side of the equation is a little less concrete than the money side, but every bit as important. Ask yourself the following questions in considering the impact of selling your company:
- Has the company outgrown me or my skill set? (There’s no shame in this. In fact, it means you have done an exceptional job.)
- Am I prepared to continue to personally bear all the risk of reinvesting for growth in my company?
- Do I value financial security as much or more than achieving that “next level” of profitability for my company?
- Is it time to diversify my assets and personal net worth, which are largely locked within my company?
- Would I enjoy life more if the monkey were on some else’s back?
If you are answering “yes” or even “maybe” to some of these questions, the life side of this equation may be indicating the time is right to begin considering the sale of all or part of your company.
This is perhaps the most important professional decisions you will ever make. So many factors come to bear and the goal is to maximize value while creating the fulfilling life you have desired.
Take the first step now by requesting your Phase5 Appraisal.