After years of building a business, a time may come when you may want to sell it off. Selling a business, either through a merger or an acquisition, is an opportunity to diversify your portfolio or even get capital to start another investment altogether. The inspiration to sell a business may be drawn from multiple quarters, including signs of favorable market conditions that may warrant selling your business.
When thinking of selling your business, perhaps the first and most important question to ask yourself is whether your business is ready for sale. If it is a business that you have worked hard to build, then you probably have already invested a lot of passion and interest in it. Before selling, you may want to evaluate all the internal and external factors to ensure that it is all-systems-go.
Your desire to sell the business should be met with an equal desire and demand from investors to purchase it. Such a mutual desire will most likely ramp up the market price for your business, allowing you to rake in good profits. One crucial area to focus on is checking your business’ net worth, which can only be done by conducting a professional valuation. A good valuation will give you an accurate overview of your revenues, profits, assets, and projected growth. A good business with a positive projected growth will most likely receive a favorable valuation based on projections.
Some of the factors that will determine whether your business will attract a good market price include the condition of the market. A strong market will attract more investors, which consequently implies that large businesses may want to acquire small businesses. Additional factors that will determine the market price for your small businesses include the kind of financial regulatory measures put in place. For example, a market with multiple taxations will highly likely discourage investors from contemplating buying your company. Besides, the heavy taxation will certainly eat into your sales and, definitely, the profits.
On the other hand, having a favorable market that is heavily regulated or with few structural regulations will attract investors to the market and drive up the demand. Evaluating your specific scenario based on these factors will help you answer the question of whether this is the right time to sell your business.