New Zealand produces its fair share of entrepreneurs, and with it a proliferation of businesses. Many of these businesses are owned by our “now retiring” baby boomers, so how do you know when is the right time to sell your business to get the best from your investment?
Whatever stage you are at of business ownership, it is important to have a business exit plan in place. The exit plan should encompass all scenarios, not just your preferred option. Sometimes you may have no choice in the matter as unexpected eventualities like pandemics, divorce, ill-health or a failed partnership impact on your ability to continue with your business.
In most cases, there will be options, ie. one partner buying out the other, or selling the business to a third party.
It pays to consider various scenarios ahead of time and keep a close eye on the market so that when the right opportunity arises you will be prepared. Being “business sale ready” means that you can always be ready for whatever eventuates. Unforeseen events aside, you will be in the advantageous position of being able to sell when it is in your best interests to do so.
Some may intend to continue with their business until retirement, but situations and circumstances can change, so watch the market and identify any emerging trends, including the supply and demand for businesses such as yours. These factors may impact your business and the best timing for you to sell and maximize the return on your investment.
The key to any successful business is an enthusiastic operator and if your passion goes, then it may be time to place your business for sale. Keep in mind that deciding to sell a business you have founded, nurtured and grown, can be agonising - but it can also be liberating!
Growing companies are more attractive to buyers than static ones, and a demonstrated track record of growth will ensure your business sells well. Understand your industry, as when it is enjoying an upsurge, there will be no shortage of buyers willing to pay a premium to get in on the action. This is especially important if you consider your product to have a limited lifespan. Wait too long and you will have missed the moment.
As a business owner you should regularly monitor your business and the market. If you have an Auckland based business, check out the businesses for sale Auckland to see how many others are for sale and what price they are asking. Maintain the health of your business, ensuring it stays relevant and attractive to prospective buyers so you get your best price when you decide to sell.
For more tips on selling your business, visit nzbizbuysell.co.nz