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When is the best time to sell a business?

With the ageing population in Australia, the majority of business sales are due to lifestyle choices rather than financial necessity. Many of our clients have either decided to retire, move elsewhere, or to focus on winding down for health reasons. Some circumstances may force the owner to sell without much time to plan, however a solid sale strategy is vital to achieving a good price.

At Transact Group, we can help prepare a business sale strategy at any stage of the business. Ideally, you will begin planning for exit a few years in advance, however we have helped businesses at all stages, including emergency sales. In this article, we explain a four indicators that suggest it may be a good time to sell your business.

 

1. Your market is in decline

Ideally, you would sell your business just before the market starts to decline, however it is extremely difficult to predict. When your industry’s market has peaked or even begun to decline, your income can take a quick nose dive. This is a sure signal that it may be time to put your business on the market, unless you are willing and able to ride out the low times and wait for the market to pick up again. Of course, we recommend having a pre-prepared sale strategy to help you move quickly and get the best price at the time.

 

2. Your net worth is tied up in your business

Your business is performing consistently, however your personal net worth is tied up in the business and its assets. At some point in time, it will become beneficial for you to convert some or all of your business equity into more liquid assets that can be accessed at a specific point in the future.

 

3. Your industry is growing, but your business has peaked

If you find that your business is unable to keep up with industry trends, it may be time to look for an exit. Commonly, business owners discover opportunities for growth within the industry, however they don’t have the resources or means to take advantage of them and end up falling behind. Fortunately, these are very favourable circumstances for a buyer, and your business is likely to interest larger companies or buyer groups who will pay a premium for the growth potential.

 

4. The passion is gone

It takes a lot of passion and commitment to deal with the daily ins and outs of running a business. If you are feeling burnt out it might be time to sell the business rather than feeling like you are caught in the drag and letting negative emotions affect your business identity. As an experienced business owner, you will have a host of unique skills that are attractive to employers. If you are no longer feeling the passion, why not try a new career or even start a new business?

 

If any of the above reasons ring true to you, give us a call at Transact Group and let us help you formulate a strong sale plan to get the best price for your business.

I have made use of the services of James Taylor to sell two businesses in the last few years. Throughout the process I have found James to be professional, knowledgeable and thorough. James was able to find high quality prospective purchasers who were financially capable and ready to purchase my businesses. James has a vast network of contacts and maintains regular communications and updates throughout the sale process. James was able to use his wealth of experience and professional network to guide me through to a successful sale for both businesses. I have already recommended James to several of my business colleagues and would not hesitate to do so again in the future.

The business was in a growth stage, so that meant there were hundreds of enquiries. James’ seasoned experience was demonstrated in the way he methodically worked through the enquirers weeding out the time wasters, and qualifying the real potential candidates. The process of selling this business was drawn out on the back of the recent tougher constraints on lending from the banks. As such, I believe James spent a lot more time on the sale than his fee had allowed for. Yet he did this with unwavering enthusiasm and continued head strong into meeting after meeting with potential clients, all in after business-hours... James stood by and saw it to the end. Many times when buyers become a little bewildered  or disillusioned, James’ keen advice to the other side kept them on track. I could not recommend his service any more, it really is a cut above the rest. 

I was very impressed with our Business Broker, James Taylor. James was very professional in all his dealings and guided me smoothly right through the entire buying and franchisor approval process. He regularly communicated with me and allowed me to draw on his excellent knowledge of small business and franchising. I would recommend him to others who are considering buying or selling a franchised business.

James helped to sell our business and was a pleasure to do business with. From his initial consultation he provided a professional service to the highest quality. His personal knowledge of the Franchise Systems helped to find and guide our buyer through the whole process. I fully recommend James to anyone looking to buy or sell a business.

Toby has provided tremendous support throughout the whole purchasing process, and exceeded all my expectations as a buyer. He has gone out of his way to facilitate between multiple parties and move things along, and the purchase could not have been completed without him and the team from Transact.

Throughout all stages of our business acquisition Garry was extremely professional and ensured consistent communication between all parties involved.  Not only was he very responsible in all of our dealings, but he also offered broad advice, guidance and the support we were looking for based on his knowledge and experience across a number of industries. Throughout the process Garry was a great sounding board for us and always available at any time.  Without hesitation, we would recommend Garry and the Team at Transact Business Sales to any future client and are more than happy for any potential clients to get in contact with us directly for any additional feedback on Garry.