Sell? Sell! Sell?! When to Pull the Trigger

An interesting post on when to sell a business… (excerpted below); as with most things, timing is crucial:

“Most sellers contact my firm either when they want to sell or when they have to sell — as opposed to when the time is right to maximize value. There are two common points in the life of a business when owners most often consider selling:

The first usually takes place somewhere between two to five years after the start, when the owner reaches a certain level of success but is too burned out from the start-up effort to continue building the business. These companies often have a bright future and are entirely sellable. The owner, however, has to accept that this is not the time to achieve maximum value. Buyers typically won’t pay much, if anything, for potential.

The second situation occurs when a business is experiencing declining sales and the owner wants out. Sales may be trending lower for a number or reasons, but chances are that buyers aren’t going to care too much about excuses. As I once heard a colleague say, ‘If your numbers are bad, your story better be good.’”