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Tag: Sell Your Business

  • When’s the Best Time to Sell Your Business? Here’s What I Tell My Clients (And It’s Not When You Think) | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Over the past 10 years, when do you think was the best time to sell a business?

    Believe it or not, it was just after the pandemic. In June 2024, the U.S. Department of the Treasury reported that American business investment had exceeded expectations, outperforming pre-pandemic projections by $430 billion. “The outlook for future business investment growth is encouraging,” the report stated. “Firms are observing persistently high returns to their capital, and founders are starting new businesses at historic rates.”

    Across industries, 2020–2022 outperformed even 2019 in many metrics. Manufacturing, for example, “surged back” in Q3 2020 with record gains in output and hours worked, according to the U.S. Bureau of Labor Statistics.

    The real lesson: It’s not about timing the market

    You don’t sell based on headlines. You sell based on your business, your industry, and your momentum.

    Company valuations have stayed remarkably consistent over the past 25 to 30 years — even during recessions like 2008–2009. Waiting for the “perfect” economic moment to exit is a common mistake that often leads to missed opportunities.

    One of our software clients was nearly ready to sell last year. But their industry began heating up so fast, we advised them to hold off. They now have a 10-year growth runway — and a chance to exit at a significantly higher valuation. On the other hand, we had a client in the print-and-postage business who waited too long. They ignored clear signs of declining demand. By the time they were ready to exit, their window had closed — and so had their leverage.

    The point: There’s no universal “right time” to sell. There’s only the right time for your business, in your industry.

    Related: When Should You Get Your Business Ready to Sell? The Best Time to Start Is Now — Here’s Why.

    Three steps to build value in uncertain markets

    Economic volatility causes many owners to second-guess their exit plan. Should I move faster? Should I take the first good offer?

    In most cases, the answer is no. Instead, refine your original plan with three key adjustments:

    1. Prioritize profitability over revenue

    Buyers don’t pay for top-line growth — they pay for what drops to the bottom line.

    One of our marketing clients was bringing in $5 million in revenue but losing $200,000 annually. After focusing on profitability, they trimmed revenue to $3 million but turned a $220,000 profit. That leaner, more profitable business was ultimately worth more — and attracted better buyers.

    2. Build operational efficiency

    A well-run business is more attractive, more resilient, and easier to sell. Aim for:

    • Fewer people delivering the same output
    • Documented, replicable systems
    • A team that can run the business without you

    Buyers want to see a machine that works — and still has room to grow.

    3. Stay realistic about valuation

    Remember Quibi? The mobile streaming platform launched with $1.75 billion in funding — and folded in six months. Or any Shark Tank episode where founders get laughed out of the room for unrealistic projections.

    Valuation isn’t about hype. It’s about performance, predictability and market reality.

    So when is the right time to sell?

    Here are two signs we see consistently:

    • Growth takes more effort for less return.
    • You start thinking, “I’ve got a couple good years left in me.”

    Those thoughts are signals. Don’t ignore them. They’re often the earliest signs that it’s time to plan your exit.

    The market moves, but your strategy shouldn’t

    Selling a business takes time — sometimes years — especially if you want to maximize value. Public markets fluctuate daily. But private business sales operate on a different timeline and follow different rules.

    The buyers are different. The financing is different. The valuation metrics are different.

    So don’t rush. Don’t panic. And don’t let headlines distract you from your long-term strategy.

    Related: Sell Your Company When You Least Expect It — How to Properly Scale and Sell Your Business

    Final thought: Focus on what you can control

    The best time to sell isn’t about market timing — it’s about business readiness.

    Ignore the noise. Focus on profitability, operational health, and what’s actually happening in your sector. That’s where real value lives — and where the best exits are made.

    Stay strategic. Stay grounded. And don’t sell your business short.

    Over the past 10 years, when do you think was the best time to sell a business?

    Believe it or not, it was just after the pandemic. In June 2024, the U.S. Department of the Treasury reported that American business investment had exceeded expectations, outperforming pre-pandemic projections by $430 billion. “The outlook for future business investment growth is encouraging,” the report stated. “Firms are observing persistently high returns to their capital, and founders are starting new businesses at historic rates.”

    Across industries, 2020–2022 outperformed even 2019 in many metrics. Manufacturing, for example, “surged back” in Q3 2020 with record gains in output and hours worked, according to the U.S. Bureau of Labor Statistics.

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    Jessica Fialkovich

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  • Every Entrepreneur Needs an Exit Strategy — Here’s Why | Entrepreneur

    Every Entrepreneur Needs an Exit Strategy — Here’s Why | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    If you’re an entrepreneur, you likely spend plenty of time thinking about how to grow your business, especially if it’s relatively new. There’s more to consider than just expansion, though. Every entrepreneur should have an exit strategy. You need a plan to ensure you can exit your company when you want to retire or explore other business ventures. Here’s why and how to go about it.

    You need business and financial goals

    Setting goals for your company is essential for long-term growth and success. A critical part of strategic planning for your business is creating an exit strategy. If you begin with the end in mind, it will be easier to determine the milestones you need to achieve to stay on track. Whether you want to grow your business for many decades or you’d like to attract buyers and exit as soon as possible, the key to getting what you want is planning well in advance.

    Related: When Should Business Owners Start Developing an Exit Plan? Here’s What You Need to Know.

    Your exit strategy should provide clarity

    An exit strategy also gives you the clarity you need for the next career phase. When you define your next steps and what it will take to accomplish them, you are more likely to succeed with your plans. Additionally, you’ll have the peace of mind needed to take action rather than stalling because you aren’t sure how to get started.

    Know who and when

    It may not be possible for you to set a definite date for exiting your business when you first create your strategy, and you don’t know the name of the buyer or the person taking over for you. But you can begin with an approximate timeline for when you’d like to transfer control and a profile of the ideal buyer. As time progresses, you can make more accurate decisions regarding the timeline.

    Related: Exit Strategy Through the Eyes of an Angel Investor

    Keep income statements and balance sheets updated

    Knowing what your business is worth is crucial to creating a solid exit strategy. Your income statements tell you a lot about the health of your business, and they’re going to tell the potential new owner a lot, too. It’s important to keep them updated and ready to go at all times. Not only does that help you better understand when the appropriate time is to exit the business, but it also gives you leverage when you negotiate with potential buyers or successors.

    In addition to your income statements, you’ll also want a potential buyer to see the balance sheet. That shows them what kind of money is coming in and going out, all in one place.

    Even though there’s a lot more to operating a business than money, cash flow is what matters when it comes down to it. Your exit strategy should include paying close attention to that cash flow to move on at the most reasonable time for your needs. There’s no reason to settle for less than you wanted to get for your company because you mistimed your exit.

    Growth potential can entice buyers

    Even if you are eager to exit your company, it’s important to time your departure in relation to its growth potential. Leaving prematurely could hinder your company’s growth. Depending on who is buying your company, they may want to buy your company on the condition that you are able to stick around for a few years before you leave for good. The opportunity for additional, even explosive, growth could encourage a substantial buyout in your favor.

    Related: 4 Go-To Moves to Help Start Your Exit Strategy Now

    Cash flow is key to it all

    Understand your cash flow and move when the time is suitable for the best chance at protecting yourself and your future. The buyer of the company will want to see strong cash flow to the business, and you’ll want to exit the company while it’s still strong and healthy to get the most significant benefit.

    The bottom line on exit strategy

    The most important concept to focus on when considering an exit strategy is what you want and need from it. Yes, you want to exit the business at a time that encourages someone else to buy or take over, but your needs are also important. With careful planning, you can find a great balance between your plans and goals for the future and exiting your business at a time when its value appeals to others.

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    Brady Frank

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  • Selling Your Business? Do These 6 Things Right Now. | Entrepreneur

    Selling Your Business? Do These 6 Things Right Now. | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    According to data from the Small Business Administration, more than half of the small business owners in the U.S. are over the age of 50. Because of this, many of us are starting to think about the future and possibly one day selling our businesses. This is why research site BizBuySell reported that the business-for-sale marketplace grew almost 5% last year, a gain of 19% since 2020 and the first half of 2023 has already “experienced strong year-over-year gains.”

    There are many reasons I’m expecting to see continued growth in the number of small business owners looking to exit their companies over the next few years. Our population is aging and much of the “boomer” generation is at retirement age. Capital gains and estate tax rates — for now, at least — remain at historic lows. Stock market volatility is driving some people to seek more stable, controllable returns for their money. And a growing number of millennials have now gained enough business experience to want to venture out on their own, and buying an existing business rather than starting from scratch is an attractive option.

    If some or all of these factors are making you think it could be time to sell your business, then know that this won’t occur overnight. You will need to plan and take these six actions before dipping your toes into the market.

    Re-visit your buy-sell agreement

    If you have other equity partners, I’m hoping you have some type of partnership or buy-sell agreement which indicates the process that will need to be followed if one or more partners exit a business — be it voluntary or not. This agreement addresses issues like valuation, insurance, taxes, transfer of shares and death or sickness of a partner. If you and your partner(s) have agreed to sell your business sometime in the future, then it’s critical to update this agreement so that everyone’s on the same page as to how the transaction will go. No buyer wants to walk into a messy divorce.

    Pay for a valuation now

    Humans always think that we’re more important than we really are. And business owners always think that our businesses are worth more than they really are. Before entering into the buy/sell market, it’s important to get a reality check. To do this, I recommend hiring an independent appraiser (ask your accountant or attorney or search online) and letting a professional without an agenda tell you just how much your company may be worth. Your appraiser should have a CBA (Certified Business Appraiser) or ASA (Accredited Senior Appraiser) qualification. Getting an appraisal done earlier will be a reality check and allow you to zero in on the areas of your business that need to be fixed in order to increase your company’s value. That way you can go into the market with a price for which you have confidence.

    Do a document check

    Take the time now to scan every important (and current) document, contract, agreement, tax return (from the past three years, at least) and written record that your company has. This includes any and all paperwork that supports your employee, real estate, insurance, intellectual property, contractor, leases, loans, supplies, sales and government obligations. Organize and save these documents online where they can be shared with permission because you will absolutely be asked to provide them. Don’t make this a last-minute fire drill.

    Bring in a technology expert

    Technology has become a significant factor in the sale of a business. We live in a big data world and buyers are looking to purchase information that they can use. They also want to make sure that a target’s systems are up-to-date and secure so that big investments and changes can be minimized after the sale of a business. To do this, you’ll need to bring in an outside technology firm to evaluate your network, hardware, security, software, and databases and give you an honest report on just how out-of-date you are and what investment is required to bring your system into (at least) the 19th century.

    Visit Home Depot

    When selling your business, you’re going to be visited by many outsiders. Perception is important and if a potential buyer drives a car over potholes in your lot, trips over cracks on your sidewalk and has to wipe away drips from a leaky ceiling that’s going to have an impact on what they think of you as an owner and the valuation that they would apply to your business. Like any homeowner looking to sell their house privately, you’ll need to spruce up your physical location to make it look attractive and up to date.

    Finally, assemble your team

    You are not going to successfully sell your business at the best value possible without a team effort. Now is the time to think about and assemble your advisory team to help you through this transaction. All important, in my opinion, is to have a great financial person — a certified public accountant or similar — to work alongside you as, in the end, this transaction is all about the numbers and you’ll need someone with a financial mind and good communication skills to help you drive it. You’ll also need a good attorney to review and create agreements. There may be other experts on the periphery — like a specialized tax person or an insurance advisor. I also strongly recommend using a business broker and making that broker part of your team as well. Brokers serve a vital function — they are experienced in buying and selling companies and can use that experience to move a transaction forward, despite the inevitable obstacles that will be faced.

    These are the six things you should be doing before you even put your business up for sale. Notice anything? How about this: We should all be doing these things regardless of whether we plan to sell our businesses, right? Our job as business owners is to maximize the value of our companies so that they continue to grow and succeed. That’s what a potential buyer thinks. We should be thinking the same.

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    Gene Marks

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  • How to Sell Your Business for 10x or More

    How to Sell Your Business for 10x or More

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    Opinions expressed by Entrepreneur contributors are their own.

    Every entrepreneur dreams of funding their freedom by one day selling their business for 10 to 20x multiples or more. Unfortunately, selling for multiple valuations is not as common as we all wish it was. We know it’s possible because we’ve seen it happen, but it’s the exception, not the rule.

    So what’s the secret? What makes a business achieve that level of success?

    As an entrepreneur and a coach to my fellow entrepreneurs, I have had countless conversations on this subject. After an intriguing meeting with my friend Tom Lambotte, founder of OneDayWorkWeek.com, I now know the secret is to establish processes and systems that allow the business to run smoothly without the founder in place.

    When it comes time to sell, the multiples will be dismal if the business is highly dependent on you to run it. If the business is self-running, the payoff has the potential to be exponential.

    There’s a bonus to this strategy: You get more freedom before selling the business. You get to work in your zone of genius and enjoy downtime and family time away from the business without guilt.

    Related: How to 10X Your Business, Income, and Life

    You may be laughing out loud now at the concept of a self-running business and a one-day workweek. But Lambotte has actually done it and believes every business can operate this way.

    Here are six steps with implementable tools for creating a self-running business.

    1. Vision design

    Begin with the end in mind. The essential first step is establishing a clear vision of your long-term personal and business goals and your company’s core values. Then you can break down your goals into annual goals and monthly goals.

    Taking the time to establish your goals and reflect on your values is especially important for founders who have more business coming in than they can handle and spend most of their time putting out fires.

    Related: Your Vision Doesn’t Matter Unless You Act on It

    2. Diagnose and track

    Get crystal clear on your biggest challenges and problems and the most important success factors of your business. Make changes where necessary. This step most often requires the objective perspective of a skilled outsider.

    Related: Asking For Help Is Good For You and Your Business

    3. The right team

    You must build a team of A-plus players united around your well-defined goals and values. You can do this by hiring for skill and aligning with company culture. Build systems so that you are always recruiting and easily attracting quality hires and so that you can train and onboard with ease. Additionally, if you’re a founder or CEO working in the nitty-gritty, day-to-day aspects of your business, you either need a COO, implementor and executive assistant, or you need to get effective people in those positions.

    4. Process hub

    A lack of well-defined processes pulls the leader into every aspect of the business. Identify your core processes, keeping in mind that in most businesses, around 20% of the processes create 80% of the results.

    After identifying them, document them well and ensure they are implemented. This is how you create self-replicating team members.

    5. Tech return-on-investment multiplier

    Leveraging your technology is the secret sauce that can free up time for you and your employees. Are there features or automations in your current software that could save you 10 minutes daily? That’s 40 hours a year.

    When everyone on your team seeks out efficient processes, you can accomplish more without hiring more people. A motivator for efficiency is profits, which equals raises. If you don’t know how to leverage your technology, get the help you need.

    6. Velocity engine

    When you have the right systems in place, it’s time to get your meeting structure and learn how to run effective meetings. It’s also time to teach your team members how to plan their weeks. With all these components in place, your velocity engine will run smoothly, and you’ll be free to work on your business, not in it, one day a week.

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    Mike Koenigs

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