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When should you sell a company? Finding the optimal time
The decision to sell your own company is a big step. There is a lot to consider and the process is extremely complex. A company sale therefore requires thorough and careful planning.
An important question that concerns many entrepreneurs is: “When should you sell a company?” In this article, we provide you with useful tips and advice.
Factors that can influence the timing of the sale
In many cases, the idea of selling one’s own company is put off for the time being. After all, a sale is often accompanied by a separation from one’s own life’s work. Our advice right at the start: think about it early on.
As an entrepreneur, you will have put a lot of energy and passion into your company, so the sale – and the optimal time for it – should be well thought out. The right moment to sell your company depends on several framework conditions – both on a business and personal level.
Economic situation:
A stable economy, low interest rates and an active buyer’s market increase the chances of a lucrative sale. In economically weak times, however, the company value can fall, which can prolong the sales phase or lead to lower sales proceeds.
Current company situation:
A company sells best when it is economically sound. Positive business figures, a stable customer and employee structure and continuous growth increase the attractiveness for potential buyers.
Personal circumstances:
A frequent reason for a sale is changes in the private sphere – e.g. retirement, family restructuring, illness or the desire for a professional reorientation.
When should you sell your business? Signs of the right time
In addition to traditional business management considerations and external factors, there are also personal or strategic warning signs that now could be the right time to sell the company:
- Decreasing motivation: Do you feel a lack of enthusiasm for the day-to-day business? In the long term, this can hinder the development of your company.
- Missing succession: Is there no suitable successor in sight who could continue to run the company internally?
- Market dynamics: The market is changing rapidly and you want to sell before structural disadvantages arise?
- Private reasons: Would you like more time for your family? Is the workload too much for you in the long term?
Anyone who recognizes these signals should not hesitate to address the issue of selling the company. We will be happy to support you.
The influence of age on the time of sale
The timing of a company sale is often automatically associated with retirement age – but age is only one aspect among many. A strategically planned sale can also make sense in your mid-40s or early 50s – especially if other goals come to the fore or a particularly attractive market environment presents itself.
Tips for planning the sale of a company
A successful company sale begins long before the actual transaction. Strategic planning, preparation and professional support at an early stage lay the foundations for a smooth process and an optimal selling price.
- Start on time – Ideally 1 to 2 years before the target sales date.
- Have a company valuation carried out in order to obtain a realistic price estimate.
- Carefully document all relevant key figures, contracts and processes – keyword: due diligence by the buyer.
- Strengthen your company structure, e.g. through delegation of responsibility, transparent organization and customer loyalty.
- Rely on professional support to avoid typical mistakes and target suitable buyers.
Conclusion: When should you sell a company?
The sale of a company requires careful planning, taking various factors into account in order to determine the optimal time to sell. Early preparation is advisable and helpful, as the sales process often takes several months. If you wait too long, this can result in poorer sales conditions, making it increasingly difficult to find potential buyers or to achieve an attractive sales price.
Do you need help determining the right time to sell?
Are you facing the challenge of selling your company and do not know exactly how to approach this project? We would be happy to assist you. We have been active in the field of M&A advisory for over 20 years and can therefore support you with the necessary experience, know-how and a broad network of experts. Make an appointment for a first personal meeting, we are looking forward to hearing from you.
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Are you also toying with the idea of selling your company or bringing in a new business partner? We would be happy to take care of your project. Benefit from our many years of expertise and the large network of specialists and investors. Feel free to make an appointment for an initial consultation.
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