Often a decline of a business is associated with a lack of ambition or energy of an owner as they approach an age when they should retire.
This is often the wrong time to sell as the business valuation will have passed its peak. It is better to make the decision earlier when the business performance is at its strongest and there is no immediate pressure to sell.
Equally, do not wait until running the business makes you physically ill. Again, this creates a pressure to sell that puts you in a weak negotiating position that could result in a sale well below the full value.
Any business purchaser will be looking for either a golden opportunity, or a bargain, or both.
The ability to apply pressure on you to sell because there are family pressures to retire in the background, or ill health, is a gift to someone looking to pay the minimum price to get the maximum value.
The problem of course is recognising when the business is performing at its peak. You need to make a decision to leave at that point, but the temptation is always to leave later as things might be even better and you could get even more for the sale.
It is a gamble for sure and only you can make this very personal decision. The trick is to be very honest with yourself. If you can see positive growth over the next 3 years, that can be a good time to sell. If growth looks like it may drop off in year 3 then you may be too late. Consider the business, yourself and the market.
Another key decision criterion is how well the business will run without you. If you are still pivotal to the business success this is not the time to sell.
Take a look at what you can do to delegate responsibility and step back from the day-to-day responsibility of running the business. The more you can step away - the easier it will be to sell.
