Deciding when to sell a business

  • by David Pottingham 
Sell a business

Deciding when to sell a business is complicated by the two conflicting factors driving it: your personal circumstances on the one hand, and the health of the business and sector on the other. 

Andrew Rogerson, a business broker who owns a branch of the Murphy and Financial Corporation, says timing a sale right is fiendishly tricky: “It’s really tough.

Timing the market is so hard to do, especially with a privately held company, because the business owner tends to make the decision to sell up when they get to a certain emotional point – when they’ve reached their financial goal, when they’re tired of running their business, sick of dealing with employees or dealing with the government. 

“It becomes an emotional decision rather than a matter of fact decision, so it really varies with each party.”

A desire to sell the business, then, is often born from negative feelings. The owner is no longer enjoying it, and nothing fills an entrepreneur with gloom like falling profits.

When the business is thriving, the business owner is obviously more likely to enjoy him or herself – and who wants to get rid of something they enjoy?

And this, says Rogerson, is why “some businesses are sold in the wrong phase of the economic cycle. If the business is in decline then that’s a big challenge for the buyer, who wants to see the business improving. So if you’re selling a business, try and sell it on the up rather than on the down.”

Listen to our podcast interview with Danielle Schaumberg, who bought Montville Tree Houses with a very clear exit strategy in mind