Timing the sale of your business right

Ideally you'll sell when your business achieves its full potential

Reasons for selling a business can include retirement or the owner falling ill.

But in many ways disposing of a business when your health is failing is the worst time to do it; the added stress and pressure of realising an adequate value will be hard to handle. The best time to begin a sales process is when the seller is healthy and can concentrate on getting the best possible deal for the business.

It is a popular theory that the best time to sell your business is when you don’t have to. When the seller’s turnover and profits are high is a great time to sell – quitting while you’re ahead, if you like.

By contrast, it’s more difficult to market a business in decline whose turnover and profits are falling. You must make sure that you plan your sale in advance, so you can boost its attractiveness to prospective buyers. It can make the world of difference in terms of the money going into your pocket.

And what are the right reasons? Selling a business is very much like selling a house in some respects. When you're selling a house, you don't say that you want to sell because the house is too small. You say that you want to move to be closer to work, for instance.

When selling a business, you want to sell to pursue a different opportunity or because you're seeking a different lifestyle (such as retirement).

Your reason for selling will be one of the first questions a buyer asks you. Give some serious thought to why you want to sell.

Common reasons include retirement, health problems, capitalisation or a career change. If the buyer isn’t comfortable with your reason they will simply walk away. If you have not made a firm decision to sell, whatever your motivation – don't. Wait until you’re sure it’s what you want to do and have a firm idea of what you want to achieve.