Three More Questions you Must be Able to Answer Before Deciding to Sell Your Business
A few months ago, we posted a blog that posed “Three important questions you must be able to answer before deciding to sell your business”. There are, of course, many questions that entrepreneurs need to get to grips with before they make one of the biggest decisions of their lives. Here are three more questions, and some useful guidance in how you can find the answer.
When should I sell my business?
There are a couple of ways to interpret this. Firstly, when in the lifecycle of my business should I sell it? Secondly, does the time of year or world events have an impact on the timing of a sale?
In terms of lifecycle, it won’t surprise you to know that value is positively impacted by growth. So, a company that is growing will be in better shape than a company that is in decline. That’s not to say a company that is static or declining isn’t saleable, but you might want to consider if there is anything you can do to boost sales or highlight potential growth before you sell.
Recent events have almost certainly raised some questions around whether it is right to sell now or wait for things to settle down. In our experience though this concern is largely unfounded. A good business will sell, regardless of what else is going on. The only exception is if world events have a direct negative impact on your business, but even then, this does not mean your business isn’t saleable particularly if the effects are temporary.
Selling your business is a process, not a one-shot deal. Acquirer profiles and seasons will change, and a good sales process will adapt to accommodate this. So, the question of when to sell really does come down to when you, as the owner, are ready to take that step.
Who should I tell that I am thinking of selling my business?
Most business owners are nervous about this question. On the one hand, it seems inadvisable to tell anyone, but on the other, this is a big decision, and you need to talk to some people you trust.
We looked at this question in more detail in our blog on confidentiality; when to release information and who to is a big part of the planning we do with our clients. But what about before you decide to sell? You know best who you can trust and who you need to talk to, but here are some thoughts from us.
- The further removed from the business the better. I am sure you have very trustworthy people working for and with you on the business, but the closer they are to the business the more impact your decision to sell will have on them. They may not go spreading your secrets, but they may well be unable to avoid bringing their own agenda into the discussion.
- Advice from your peers is preferable. If it’s advice you are looking for, you ideally want to talk to someone who understands the position you are in. That would be other people who own, or have owned, a business. As well intentioned as they may be, it is rare that someone who hasn’t been in your shoes will give you the best advice.
- Talk to the experts. Entrepreneurs Hub are always delighted to speak to business owners on a confidential and no-obligation basis about their options. We make no charge for an initial consultation and it’s a great way to help you think through some of the issues.
What do I want to happen to the business, staff and clients after I sell?
This will be a more important factor for some business owners than for others, and a lot of it depends on the nature of your business. But for most of you there will be, to some degree, a concern over what happens next for the people who have helped you get the business to where it is today. In fact, it may be one of your strong reasons to sell, recognising their future is better with the fresh investment and energy of a new owner in the driving seat.
The reason it is worth thinking about before you decide to sell is that it may have some bearing on how you approach the sale, whether or not you include competitors in the approach, and how long you stay involved post-sale, if at all.
If you are thinking about selling and would like our help in answering any of these questions, please get in touch and we will arrange a free, no-obligation virtual business review.
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FAQs – Selling Your Company
How do I sell my business in the UK?
Selling a business in the UK typically involves preparing financial information, obtaining a valuation, identifying suitable buyers and negotiating the terms of a sale. Most owners work with an M&A adviser to manage the process confidentially, approach qualified buyers and maximise the value achieved.
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
What is my business worth?
A business is typically valued using a multiple of its profit, usually EBITDA or adjusted net profit. The multiple depends on factors such as growth potential, recurring revenue, customer diversification and management strength. Professional valuation provides a realistic price range and helps position the business effectively for buyers.
Determining your business’s value is more than just calculating a number it’s complex with key factors, that said the basic equation is actually quite simple. Read more…
How long does it take to sell a business?
Selling a business in the UK typically takes between six and nine months from preparation to completion. The timeline depends on business readiness, buyer demand and the complexity of due diligence. Early preparation and clear financial reporting can help shorten the process.
When is the best time to sell a business?
The best time to sell a business is when it is performing strongly, growth prospects are clear and you are not under pressure to sell.
Business owners often achieve the strongest outcomes when:
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Profits and revenue are growing
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Financial records are clear and well prepared
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There is visible future growth for buyers
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The owner has planned the sale 12–18 months in advance
Market conditions can also influence valuations. Strong buyer demand, sector growth and favourable economic conditions can increase acquisition activity, but a well-prepared business can attract interest in most markets.
Deal activity often increases during spring and autumn, although transactions complete throughout the year. In practice, preparation and business performance usually matter more than trying to perfectly time the market.
Ultimately, the best time to sell is when both the business and the owner are ready, with the company positioned to demonstrate strong value to potential buyers.
Do I need an adviser to sell my business?
Many business owners choose to work with an M&A adviser to manage the sale process. Advisers help value the business, approach qualified buyers confidentially and negotiate terms. This structured approach can increase the likelihood of achieving a higher value and a successful transaction.
How is confidentiality protected during a sale?
Confidentiality is protected through controlled information sharing, anonymous buyer approaches and strict non-disclosure agreements. Potential buyers receive limited information initially and must sign an NDA before any sensitive details are released. Business owners approve prospective buyers and maintain visibility over all documentation throughout the process.
How do I value my business before selling?
Valuing a business before selling usually involves analysing profitability, identifying valuation multiples and assessing key value drivers such as recurring revenue and customer concentration.
What’s the quickest way to sell a company?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
What’s the best way to sell a business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…