I was having a conversation yesterday with a good friend in the MSP community who is considering selling his business. He’s been approached by someone doing a roll-up, and was wondering if I had any advice or thoughts.
It got me thinking - when is the “right” time to sell your business?
Obviously the answers are not black and white, but I managed to come up with the following list that I think will serve me well when the time comes; hopefully it does for some of our readers as well.
- Am I still fired up to come to work every day? If the answer to this is no, it’s time to go!
- Do I have a personal situation in my life that dictates that it is time to sell the business? This could be the arrival of a child that I want to take a year off to hang out with, a sudden illness, etc.
- Do I believe that the opportunity in the market is no longer there or a good one? Has something changed in the marketplace, competitive landscape, economic policies, etc. that make this opportunity less attractive than I originally thought?
- Have I received an offer that is significantly beyond what I think the company is actually worth?
- Do I need more resources to accomplish my objectives? Not all sales mean you are exiting the business. It may be more of a financial partner that can provide the resources you need to accomplish your goals with the business.
- Do I believe that this opportunity is the highest potential of those I could currently be pursuing? This is the most dangerous one…it’s the “grass is always greener” situation. However, I think it’s important to evaluate what your best opportunities are and be willing to make bold directional changes when appropriate.
I’m sure there are others - let me know if we should add to the list!
MRC
PS - If you are at the point of wanting to sell your business, the book Selling Your Business for a Premium is highly recommended and can be found at the Gazelles bookstore here.
