You would be forgiven for thinking that only the unsuccessful business finds itself up for sale. It's a popular misconception, no doubt founded on the idea that nobody would want to hand over control of a viable enterprise that generates income for its owners.
However, the reality is that many external factors can convince company owners to sell up and move on. Indeed, a recent online poll of business leaders suggests that more than one third of all entrepreneurs who have sold their company did so because they planned to retire.
This means there is any number of viable, ongoing businesses up for sale and on the market at any one time. There are, of course, struggling enterprises too. The primary concern of any owner is therefore to demonstrate to potential buyers that theirs is one of the success stories, and not an attempt to cash out quickly from a failing concern.
A successful sale is always the result of thoughtful planning, seizing opportunities when they present themselves, and maybe even a little luck. But above all, it is choosing the right moment to sell. The following tips will help to explain why this is.
First of all, we should begin by looking at the factors within the business. These are both the everyday, internal concerns of operation, and the broader life cycle of the company. Both can present reasons for a sale, and can dictate the correct time.
Day-to-day operations may become an influence on your decision to sell for many reasons, from logistical demands to the natural desire to decrease your workload as you approach retirement. These considerations may be too small a reason to sell up taken on their own, but could nonetheless be the contributing factor which makes the final decision inevitable.
The old adage “a business should work for its owner, and not the other way around” should never be forgotten and, if you face the day with dread rather than enthusiasm, that is probably a good sign that you should start to consider a sale.
Similarly, the natural life cycle of businesses can dictate a good moment to sell, from the family-owned hardware store to the multinational tech firm. Every business has a natural life cycle, dictated by its ongoing business plan.
Selling up at the point of maturity will give your enterprise the best chances of rejuvenation under new leadership. More importantly, it will also present your company in its most stable and attractive light to interested parties, and maximise your returns on the sale.
Of course, every internal factor is itself affected by the bigger picture of market forces and external factors. These can present the business owner with a perfect storm of combined factors which may present an ideal moment to sell, or make it an unwise move. Consider the assets of your business: its debts, its turnover, even its location.
The market value of all of these can be affected by external factors. A business occupying a prime piece of real estate may become an ideal candidate for sale based solely on the market value of its premises, for example. Conversely, a business which has taken on an amount of risk to facilitate expansion may find itself unable to attain a good market value in times of deflation or high interest rates, when servicing debt can become costly.
Sometimes chance may play a part in the decision too. This is why, as a business leader, one of your key skills is identifying and seizing an opportunity when it presents itself. A good entrepreneur will think on his or her feet, and will consider every option.
Perhaps you have been seeing good business, and selling up is the furthest thought from your mind? Nonetheless, if you receive an attractive offer from a rival or an interested party, you would be well advised to weigh up every benefit and drawback to this unsolicited offer.
The final point is this: every entrepreneur sets out to create a successful business which survives beyond their own personal working life. This makes selling off your enterprise an inevitability at some point in its life cycle. For this reason, it is a smart move to have an exit strategy in place when the right moment presents itself.
This article was contributed by BusinessesForSale.com, the market-leading directory of business opportunities from Dynamis, the online media group also behind FranchiseSales.com and PropertySales.com