When is the right time to sell your business?

There truly is no perfect time to sell your business.  You will always find another day, month, or year that could be better, or another reason to justify your position.  However it is important that you take into consideration several questions and points that could help you narrow down margins for poor decision making.  While most startups fail, most entrepreneurs will succeed.  Knowing when to make a move is one of many characteristics defining a successful entrepreneur.

In my opinion, the most important item in order to be successful in business is passion.  If the business owner’s ‘flame doesn’t burn inside’ anymore, and passion is gone; if the owner of the business no longer likes working at their company, it is time to sell- money and other factors aside.

Understand that the decision to sell your business should never be a spur of the moment.  There are far too many factors to be taken into consideration before making a knee-jerk reaction to an offer that may have looked good at the time it’s presented, or any large sum of money.

There are factors that you can control, but first I want to address the ones you can’t: 

What are the market conditions?  While this will not always be relevant based on your particular business or industry, it is important to understand the economy and outside factors that could help drive your businesses’ value up or down.  Terrorist attacks effect travel.  Are you in the travel industry?  If you are, what type of effect would a recent scare have on your business?  Would sales go up?  Would reservations go down?

What is going on in your industry?  Keeping up with changes and trends in your specific industry will also dictate timing, especially with technology.

Some other important questions that arise from factors that you CAN control include:

What do your financials look like?  Are you able to produce 2 to 3 years of tax returns that are accurate and show maximum profitability?  While it may be apparent that owners of a business are producing higher numbers than their financials show, the only justification to that ‘extra income’ is documentation.  Most business owners will bury many personal expenses into their financial statements.  Without documentation for these ‘write-offs’, it convolutes the due diligence process and complicates a deal.  Unclaimed cash is almost always a part of a due diligence period, but undocumented cash is always going to rest in the trust of a Buyer to his/her Seller.  Solid books and tax returns help deals qualify for Visa opportunities, and also allow for loan and SBA pre-approval to open up a wider potential Buyer-pool.

Are you willing to play a fundamental part in the transition process of a business sale, and potentially stay involved for an extended period of time?  A standard requirement in most contracts includes a 14-day period in which the Seller will train the buyer (free of cost) to help him/her get acquainted with their new business.  There are often situations where the Seller stays with the business for an extended period of time and is a core component in the purchase contract.  The most important key ingredient that helps get a deal to the closing table is integrity between the Buyer and the Seller.  Transparency and commitment from the Seller is often exerted by the Seller staying involved for an extended period of time.  Are you willing to do that?  Perhaps you even want to maintain a relationship with the business, maybe as a part-time employee or consultant?

Do you have a team of professionals ready to assist you in this tedious process?  The sale of a business does not happen on a handshake.  Make sure that you have attorneys, accountants, consultants, appraisers, and your business broker all geared up and prepared for the process.  They will be instrumental in negotiating, mediating, valuating, and helping bring your deal to the closing table.  Prepare them for the calls they will get from Buyers, bankers, and others that could potentially be involved with the deal.

You must ask yourself the following questions:

What is your plan after you sell?  What will you do the day that your business is sold? If your trip is already booked to travel the world, you probably have the right idea.  Is there another venture that has your interest or is there another opportunity knocking at your door?  Is there another passion you want to chase?  These are all good examples.  However if you are selling knowing you will eventually (or even immediately) get back in the same industry/type of business, understand there are legal factors that could hurt you.  Make sure to not sign an overly restrictive non-compete.   Selling is about letting go and moving on.  Make sure your emotional attachment to a business that you put your blood, sweat, and tears into- is not going to give you second thoughts.  Be committed to whatever decision you make, and have a plan post sale.

What are your other options besides selling?  The answers to this question will vary by situation.  If you do not sell your company, will you keep it?  Will you shut it down?  Will you try to bring on a new investor?  There are often cases in which a Buyer ends up turning into a strategic partner.  Evaluate all of your options, and be prepared for some curveballs. Ask yourself if you will really be improving your financial or personal situation by selling?

Are you prepared for some of the negative effects of selling your business?  Perhaps one of the hardest things for a business owner to do is tell your employees (who you have been shielding the deal from) that they have a new boss and you are no longer their captain.  There are many other public repercussions that you will have to face, such as investors, friends and families’ opinion. The personal bonds with your employees will perhaps be the most emotional effects of the sale of your business knowing their financial livelihood is no longer in your control, and that those relationships may no longer exist.

What is a more predominant way to describe your current situation: Passion in the business or Exhaustion from the business?  If you are absolutely exhausted from your efforts and it is taking a toll on your health or personal life, it probably is time to tell.  If passion is driving you to work harder through the exhaustion, you may not be ready to give it up.  Either way, these are key items to notate when making this decision.

Are there steps you can take to make the business more attractive to potential buyers?  Can you increase the value of your business by making some changes prior to listing and selling your business?  Consider factors that make it attractive, or not attractive.  What are your profits? What are you current sales trends?  What is the location of your business?  What is the condition of your equipment?  A major issue that always comes up when an individual wants to sell their business, is they believe that the business can function just fine without them.  However, that particular business is far too dependent on the business owner, or perhaps too dependent on strategic relationships that are rooted to the owner.  Start to make the shift to which the business can work better with you around, in preparation for a sale in which you will not be a part of that business.  This is just one example of preparations that can be done to make a business more attractive.


If you are visiting this site to sign the petition in regard to getting the

Payroll Protection Program (PPP) automatically forgiven

for small business owners that received less than $150,000:




If you would like to learn more about this petition and what is going on with PPP loans and the sale of businesses,

please click here.

This petition was created by the help of Deborah A. Carman, Esquire with Carman Law Firm, P.A., pro bono.  To visit her site,

please click here.

Steve Mariani, from Diamond Financial Services, also helped create this petition, pro bono.  To visit his website,

please click here.



Thank you for your support.

Jim Parker