When to sell your company is one of the most important decisions facing successful entrepreneurs, particularly so-called serial entrepreneurs, people who like the challenge of starting up new firms, exploring new markets – and then handing it off. Because even for those who mean to sell the company eventually, it is a tricky question as to when and to whom – not to mention for how much!
Indeed, “when to sell your company” is one of the most sought-after of keyword searches on the internet these days as more and more people seek guidance on just what are the best conditions for a sale. Occasionally business isn’t so great and, frankly, one hopes to get out before things get worse.
Other times more enticing opportunities present themselves, opportunities which require, say, extra cash right away or your full undivided attention. The reasons to sell your company are as many as the times when you could, and, even, should.
Timing is key, as can be imagined, but one general principle stands the test of time: the best time to sell is when you do not have to! Desperation can make for really bad decisions, and may even scare off potential buyers. After all, when business is doing good, few owners think of selling. Businessmen and women are natural go-getters, positive Type A folks who are eternal optimists.
But the reality is that sales and profits tend to be non-linear, and perhaps rather circular! There exist inflection points where growing to the next stage of success will involve considerable risk and investment. Such times are the best for evaluating market conditions with an eye towards maybe selling the company. Having investors will really complicate matters, so normally it’s a choice between taking on venture capital or just selling the company for cold hard cash.
