When is the best time to sell a business?

With the ageing population in Australia, the majority of business sales are due to lifestyle choices rather than financial necessity. Many of our clients have either decided to retire, move elsewhere, or to focus on winding down for health reasons. Some circumstances may force the owner to sell without much time to plan, however a solid sale strategy is vital to achieving a good price.

At Transact Group, we can help prepare a business sale strategy at any stage of the business. Ideally, you will begin planning for exit a few years in advance, however we have helped businesses at all stages, including emergency sales. In this article, we explain a four indicators that suggest it may be a good time to sell your business.


1. Your market is in decline

Ideally, you would sell your business just before the market starts to decline, however it is extremely difficult to predict. When your industry’s market has peaked or even begun to decline, your income can take a quick nose dive. This is a sure signal that it may be time to put your business on the market, unless you are willing and able to ride out the low times and wait for the market to pick up again. Of course, we recommend having a pre-prepared sale strategy to help you move quickly and get the best price at the time.


2. Your net worth is tied up in your business

Your business is performing consistently, however your personal net worth is tied up in the business and its assets. At some point in time, it will become beneficial for you to convert some or all of your business equity into more liquid assets that can be accessed at a specific point in the future.


3. Your industry is growing, but your business has peaked

If you find that your business is unable to keep up with industry trends, it may be time to look for an exit. Commonly, business owners discover opportunities for growth within the industry, however they don’t have the resources or means to take advantage of them and end up falling behind. Fortunately, these are very favourable circumstances for a buyer, and your business is likely to interest larger companies or buyer groups who will pay a premium for the growth potential.


4. The passion is gone

It takes a lot of passion and commitment to deal with the daily ins and outs of running a business. If you are feeling burnt out it might be time to sell the business rather than feeling like you are caught in the drag and letting negative emotions affect your business identity. As an experienced business owner, you will have a host of unique skills that are attractive to employers. If you are no longer feeling the passion, why not try a new career or even start a new business?


If any of the above reasons ring true to you, give us a call at Transact Group and let us help you formulate a strong sale plan to get the best price for your business.