If you’re planning to sell you business, you likely have many questions: How much will I get? How will the sale take place? To whom should I sell? But first and foremost, WHEN should I sell?
Most business owners are concerned about selling their business, especially as retirement age approaches. While they might like a fail-proof recipe for determining the optimal timing, there isn’t one. There are, however, many options.
Generally, there are three possible scenarios.
Controlled Transaction
In this case, the business owner has all the time needed to identify a potential successor, train that person and hand over the reins and ownership. These conditions requires the greatest investment in both time and preparation. Usually, it takes at least five years to identify and train a successor for an optimal transfer.
Unsolicited Sale
Unsolicited sales generally come from a competitor offering to buy the business for more than its market value. Such opportunities are very rare and, by and large, unexpected, usually occurring when the market is in a slow growth period. Because an unsolicited offer is unlikely to happen more than once, it should be very carefully analyzed.
Forced Sale
This should be avoided at all costs. A forced sale occurs when the business is having financial difficulties or the owner or someone close to him or her becomes ill or incapacitated. Generally, there is insufficient time to prepare for the sale. In most cases, the owner-manager is the key figure in a business and, if a successor is not adequately prepared, the value of the business can drop considerably if the sale takes too long.
Whatever your situation, you should get the support of seasoned professionals who understand you and can guide you through the entire sale process!
At Raymond Chabot Grant Thornton, we have professionals with the requisite skills to help you realize a successful sale.
