Deciding when to sell a company involves a challenging mix of financial and personal factors, especially for entrepreneurs who have invested years of dedication into a company. But with the right approach and timing, selling your business can be a strategic transition that honors your legacy and secures your future. Here are 11 signs that suggest now is the time to sell your business.
1. You Want to Try Something New
If you feel a pull toward a new opportunity or challenge, it might be time to transition. Selling your business can give you the financial capital and mental freedom you need to seize your next adventure. This could be your chance to invest in a rapidly growing market, join a groundbreaking startup, simply move on to retirement.
Selling allows you to leverage your past success to fund your next venture, armed with the experience you’ve gained along the way.
2. You Are No Longer Passionate About the Business
If you find yourself no longer looking forward to work, or if challenges now feel like burdens, you may be experiencing symptoms of burnout. In that case, selling could be the best move for your well-being and your business.
Rather than letting your business stagnate, a transition secures your legacy and allows a new owner to bring renewed enthusiasm. It also lets you refocus on activities that restore your energy and preserve your wellness.
3. You Are Ready to Retire
After years of building and leading, maybe you’ve reached a point where you want more leisure time, travel opportunities, or time with family. Retirement is one of the best and most common reasons to sell a business. Selling your business lets you retire on your own terms by cashing out your equity to secure your desired future.
4. Other Personal Life Events Are Pushing You to Transition
Beyond retirement, other significant personal life events can prompt an exit. If you or a loved one faces health issues, the demands of business ownership may become unsustainable. Other changes, like caring for a new child or aging parents, or relocating away from where your business is based, could also spark a transition. Selling could give you the time and space you need.
5. You’ve Reached Your Goals
Many entrepreneurs are goal-driven, pursuing targets for revenue, market share, or innovative product development. If you’ve met these ambitious goals and no longer have the same drive to scale, it could be a sign that you’ve completed this chapter and are ready for a new one. Exiting while ahead lets you capitalize on the value you’ve created, setting yourself up for a new project to fuel your passion — whether that’s your next business venture or a comfortable retirement.
6. Your Business Has Peaked
One of the most strategic times to sell is when your business is performing at its best, with solid growth, healthy financials, and positive market momentum. A company at its peak is attractive to buyers, who see immediate value and a clear path to continued success. If that’s your position, selling now could help you command the highest possible fair market value as a selling price. Waiting too long to sell risks unforeseen downturns, which can diminish your business’s value.
7. The Market Says Now Is a Good Time to Sell a Business
Timing is key in business exits. A strong seller’s market is one with high demand and attractive valuations. And if you’re considering an exit, this could be the ideal time to maximize your return. The United States mergers and acquisitions (M&A) market is looking strong for sellers, with favorable factors including:
- Undeployed capital: Private equity (PE) firms have built up over $1 trillion in undeployed capital, creating pressure to invest.
- Stabilizing interest rates: As interest rates become more predictable and affordable, buyers are more willing to borrow for buyouts.
- Corporate restructuring: Companies are looking to sell business assets that no longer align with their core strategy and acquire entities that enhance their technological capabilities.
- Technological acceleration: Rapid adoption of technologies like artificial intelligence (AI) and cloud computing means that many companies are looking to acquire other businesses with innovations in these areas and the skilled talent to implement them. This creates high demand and a seller’s market for tech-forward companies.
- Eased regulations: The regulatory environment for M&A, especially for midsize deals, may become less restrictive. This makes it simpler to buy businesses, further increasing demand.
Factors like technological acceleration and corporate restructuring toward digital transformation mean that software-as-a-service (SaaS) business sellers with scalable technologies will be among the biggest winners in this market.
Government contracting (GovCon) business owners also have excellent selling prospects. The U.S. government remains the world’s largest and most consistent buyer of goods and services, making GovCon businesses with stable contracts attractive to buyers who value reliable revenue streams. In the coming year, demand may be especially high for GovCon businesses with strong cybersecurity, AI, and cloud computing integration, and talent skilled in these areas.
8. Attractive Acquisition Offers Emerge
Sometimes, a compelling offer prompts a smart but unexpected decision. If a larger company recognizes your business’s value and makes a strong offer, it’s worth considering a sale on terms that align with your personal goals. Experienced M&A advisors can help you evaluate offers and negotiate favorable terms.
9. Industry Changes or Disruptions
If your industry faces rapid changes that threaten your business model, or if new players emerge with significant competitive advantages, a transition might be wise. Selling while your company remains relevant and valuable can minimize potential losses, setting you up to pursue new ventures aligned with emerging trends or to retire with the highest possible return.
10. Need for Resources Beyond Your Current Capacity
As businesses grow, new challenges may demand specialized resources, significant capital, or broader expertise. If your business’s continued growth depends on external investment or a larger organizational structure, a sale can be a strategic solution. An acquirer can unlock access to the technology, industry connections, and specialized knowledge needed to propel your business forward.
11. Succession Planning Becomes a Priority
For many owners, ensuring their company’s longevity is crucial to their sense of fulfillment and success. If there’s no clear internal successor, or family members aren’t interested, selling to an external buyer with a passion for your industry could be your best succession planning move. A well-executed sale can transfer your business to a new owner who shares your vision, ensuring continued quality, customer trust, employee well-being, and legacy.
Experience a Seamless Transition With sbLiftOff
Recognizing when you should sell your business is your first step into a future of new possibilities. Whether you’re ready to retire, pursue a new venture, or capitalize on favorable market conditions, the decision to sell is a personal one that requires the expert guidance of an investment banker who knows your industry. At sbLiftOff, we understand the importance of this life transition, and we have the resources to support you as you move ahead.
sbLiftOff is an M&A advisory firm with a proven track record of closing favorable sales for GovCon, Software, SaaS, and other commercial businesses with annual revenues between $10 million and $70 million. Our advisors have built, led, and exited companies of their own before completing deals in excess of $2 billion. Choose sbLiftOff for white glove support with:
- Identifying and engaging the right buyers
- Securing a higher sale price and better terms
- Improving the likelihood and speed of a successful close
Reach out today to consult an expert M&A advisor about your business and your future.
