5 Signs It’s Time to Sell Your Business
One of the most common questions I am asked as a corporate finance advisor is, “What is an indicator that it is the best time to sell my business?”. In business, as in comedy… timing is everything. Many a good story features the phrase, “in the right place, at the right time,” somewhere in the narrative.
In a previous blog we looked at five of the most obvious signs that now is the right time to sell your business… you can read that blog here. But for this blog, I wanted to look at five more indicators and what they mean for you and your exit strategy.
Had a knock at the door?
Of course, selling a business also relies on someone being prepared to buy your business. So, the question of timing is not one-sided either. If you have had an approach from an interested acquirer or even multiple acquirers, that could be a good indication that your business is in a good position to sell. Even if you are not quite ready it might be worth exploring a business valuation to determine if making the most of the opportunity presented is, in fact, the right thing to do.
A change in family circumstances
Many of our clients come to us prompted by a change in family circumstances. This could range from a need or desire to be more present; grandchildren are a common example; to a simple desire to reclaim time and realise the asset you have built. Whatever your personal circumstances, family can be a powerful influencer in the timing of a decision to sell your business.
Friends and colleagues are retiring
One of the greatest influences on our desires is those around us. It’s a very natural feeling to see something that brings our friends joy and to want that for ourselves. So, if you are seeing those around you enjoying the benefits of retirement, or even having sold a business themselves, it is quite natural to begin to think about selling your own business. As has been said many times, the right time to sell is when you are ready.
Opportunities are being missed
This can be a very difficult one to face up to as a business owner. But the truth is, as your business grows you may find your own skills, experience or other factors limit the company’s ability to take advantage of some opportunities. This is explored further in our recent blog: 5 strategic reasons your business is worth more in someone else’s hands. If this resonates with you then it may be a good time to explore your options.
Advice from your Wealth Manager
One of the best things you can do, if you haven’t already, is get yourself a good wealth manager. This is not the same as an accountant, this is someone who can sit down with you and look at your personal situation and advise you on how to make your money work for you. As part of the discussions they have with you, an exit strategy from your business is bound to come up. They will be able to help you determine when it is right for you to consider selling your business.
These are only a handful of the signs it could be the right time to sell your business. Before you embark on the sale process, make sure you spend some time with an advisor from a corporate finance company such as Entrepreneurs Hub to assess the saleability of your business and to walk you through how to value a business for sale.
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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 by applying a multiple to its sustainable profit, often EBITDA or adjusted net profit. The appropriate multiple depends on factors including growth, recurring revenue, customer concentration, management strength, owner dependency, market conditions and buyer demand.
Determining what your business is worth involves more than applying a simple formula. Use our Business Valuation Calculator to obtain an initial valuation range, or read our simple business valuation guide to understand the factors buyers consider.
How long does it take to sell a business?
Selling a business in the UK typically takes around 12 to 18 months from initial preparation to completion, although some transactions may be quicker or take longer. The timeline depends on business readiness, buyer demand, deal complexity, due diligence and how quickly the legal terms can be agreed.
Preparing accurate financial information and organising key documents in advance can help reduce avoidable delays. Read our complete business sale timeline to understand what happens at each stage.
When is the best time to sell a business?
The best time to sell a business is usually when it is performing strongly, its future growth is clear and you are not under pressure to complete a sale. Buyers are generally more attracted to businesses with rising or stable profits, reliable financial information and credible opportunities for further growth.
Business owners are often in a stronger position when:
- Revenue and profits are growing or consistently strong
- Financial records are accurate and up to date
- Future growth opportunities can be clearly demonstrated
- The business is not overly dependent on the owner
- There is a capable management team in place
- The owner has started preparing well in advance
Market conditions can also affect buyer appetite and valuation. Factors such as sector growth, access to finance and competition between buyers may support stronger deal activity, but preparation and business performance are usually more important than trying to identify a perfect month to sell.
Ultimately, the best time to sell is when both you and the business are ready, and the company can demonstrate sustainable performance and future value to potential buyers.
Use our Exit Readiness Tool to assess how prepared your business is, or read our guide on when to sell your business for further guidance.
Do I need an adviser to sell my business?
You are not legally required to use an adviser to sell your business, but many owners appoint an experienced M&A adviser to help manage the process. An adviser can prepare the business for sale, identify and approach suitable buyers confidentially, coordinate negotiations and support the transaction through due diligence.
The right adviser can also help create competitive tension, protect your time and reduce the risk of avoidable mistakes. Read our guide to choosing the right business sale adviser to understand the different types of support available.
How do I prepare my business for sale?
Preparing a business for sale involves strengthening its financial performance, reducing risk and making sure it can operate successfully without heavy reliance on the owner. Buyers will also expect accurate financial records, clear contracts, organised documentation and evidence of future growth.
Preparation should ideally begin well before approaching the market, giving you time to address weaknesses that could affect value or delay the transaction. Use our Exit Readiness Tool to assess how prepared your business currently is.
How is confidentiality protected during a sale?
Confidentiality is protected through controlled information sharing, anonymised buyer approaches and non-disclosure agreements. Potential buyers usually receive limited information at the start of the process and must sign an NDA before commercially sensitive details are released.
Prospective buyers should be assessed before receiving further information, with documents shared gradually according to their level of interest and credibility. A well-managed process also allows the business owner to retain oversight of who is approached and what information is disclosed.
What documents do I need to sell my business?
The documents needed to sell a business commonly include financial accounts, management information, forecasts, customer and supplier contracts, employment records, tax information and evidence of intellectual property ownership.
Buyers may also request details of property, insurance, legal disputes, regulatory matters and company ownership. Organising this information before due diligence begins can reduce delays and help maintain buyer confidence. Our Business Sale Due Diligence Checklist explains the main information buyers are likely to request.
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…
How can I increase the value of my business before selling?
You may be able to increase the value of your business by improving sustainable profits, developing recurring revenue and reducing reliance on individual customers or the owner. Buyers also value capable management teams, reliable financial reporting, scalable operations and clear opportunities for future growth.
The earlier you identify the factors affecting value, the more time you have to make meaningful improvements. Use our Business Valuation Calculator for an initial indication of value and our Exit Readiness Tool to identify areas that may need attention.