When you should sell your business (and when not to).
When it comes to selling a small business in Sydney, or even a franchise business, there are two questions to ask yourself:
- Why do I want to sell my business?
- Is the business experiencing a period of growth or stability?
Answering the first question is complicated and nuanced and will take you on a path of self-assessment, if you haven’t already done so. Reasons for selling may include one of many factors, but being clear on your motivation will give you the best chance of selling your business for the best possible price and moving on with your health and wellbeing intact or in better shape.
Here are some scenarios that can tell you it’s the right time to sell:
A new challenge – in some cases, the lure of another business challenge is the motivation for selling. With the time and effort required in selling a business, it’s worthwhile doing a thorough analysis of the business for sale and the businesses you’re looking to buy in order to understand the opportunity costs in buying and selling businesses in Sydney.
Part of the plan – your business may be a part of your long-term financial plan, an asset that you trade much as you would your home at different stages of your life. If this is the case, planning for the next asset in your portfolio is as important a part of the plan as selling your existing business.
Retirement – this is probably the most complex reason for selling a business and can be one taken under pressure to slow down, deteriorating health or even boredom. Being clear about the reasons for selling will underpin the value of your business asset as well as your plan once the business is sold.
More people fall ill within the first year of retirement than at any other time in their lives. The purposefulness of work, generating an income, and delivering a service or product are critical in devising a plan for the future.
Plan Ahead for Business Opportunities
It’s never too early to begin planning the sale of your business. Most people who purchase a business will discuss an exit strategy at the outset, but quickly lose sight as the daily routines of running a business takes over.
Take the time to write up a business plan and evaluate it quarterly, twice a year or annually. Make adjustments to your goals, projections and valuation that are in line with market dynamics as well as being a realistic account of your position. When you are ready to sell, most of the hard work in valuing your business will already have been undertaken and updated regularly.
Get the help you need to speed up the sale process
Expert advice for an experienced business broker is the first step in assessing your readiness for a sale. Taking the step to engage a business broker as early as possible will help you establish your goal and manage the sales process.
Click here or call 02 9552 1111 (9am – 5:30pm Monday to Friday AEST) to speak to an expert business broker at LJ Hooker.
