Are you trying to time when you sell your business so that you exit when both your business and the economy are peaking?
At Maximum Possibilities, we partner with you to help answer the question of, When is the most opportune time to sell my business? You wouldn’t risk the valuation of your business on chance. And, while your objective to build your company’s value is admirable, here are five reasons why you may want to sell sooner than you might think.
1. You May Be Choking Your Business
When you start your business, you have nothing to lose, so you risk it all on your idea. But as you grow, you naturally become more conservative, because your business actually becomes worth something. For many of us, our company is our largest asset, so the idea of losing it on a new growth idea becomes less attractive. We become more conservative and end up hindering our company’s growth.
2. Money Is Cheap
We’re coming out of a period of ultra-low interest rates. Financial buyers will likely borrow money to buy your business so—at the risk of oversimplifying a lot of MBA math—the less it costs them to borrow, the more they will spend to buy your business.
3. Timing When You Sell Your Business is a Fool’s Errand
The costs of most financial assets are correlated, which is to say that the value of your private business, real estate, and a Fortune 500 company’s stock all move in roughly the same direction. The problem is, you’ll have to do something with the money you make from the sale of your company. This means you’ll likely buy into a new asset class at the same frothy valuation as you’re exiting out at.
If you’ve moved your customer data into the cloud, it’s only a matter of time before you become the target of cybercrime. Randy Ambrosie, the former CEO of 3Macs, a Montreal-based investment company that manages $6 billion for wealthy Canadian families, decided to sell in part because he featured feared a cyber attack. Ambrosie and his partners realized they had been under-investing in technology for years. This occurred at a time when cybercrime was becoming more prevalent in the financial services space. Ambrosie sold his firm because he realized the cost of staying ahead of hackers was becoming too much to bear.
5. There is No Corporate Ladder
In most occupations, the ambitious must climb the ladder. Aspiring CEOs must methodically move up, stacking one job on the next until they’re ready for the top post. They must put in the time, play the right politics and succeed at each assignment to be considered for the next rung.
By choosing a career as an entrepreneur, you get to skip the ladder entirely. You can start a business, sell it, take a sabbatical and start another business. Your second (or third) business is likely to be more successful than your first. The sooner you sell your existing business, the sooner you get to take a break and then start working on your next.
Sell Your Business with Maximum Possibilities
It can be tempting to time the sale of your business so that the economy and your company are peeking concurrently. In reality, it may be better to sell sooner rather than later. Let Maximum Possibilities help you determine the valuation of your business and the time to sell to maximize your profits.
Schedule your call today and let’s begin the conversation about when the right time to sell your business actually is.