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Signs It’s Time To Sell Your Business

Roger Pierce is the voice of Scotiabank's Get Growing for business website. Author, speaker and columnist, Roger has become one of Canada's top small business experts by sharing what he's learned from building 12 companies.


The best time to sell a business is different for each entrepreneur.

For some business owners, the best time to sell is when they've had enough - enough of the stress, the work, the responsibilities and the long hours. Others may plan to pass the business to family to enjoy watching their legacy continue. And, some business owners may sell in response to life or marketplace changes.

Watch for these signs suggesting you may be ready to sell your business.


Family wants the wheel

You've groomed one or more family members to replace you...and it's time to implement that transition. Or, you feel family members are pressuring you to relinquish control and step aside.

Work with a qualified succession planning expert to ensure a smooth transfer of ownership. Such an advisor will work to accommodate the interests of all people involved.


An unexpected offer

You are approached with an offer. You weren't planning to sell your business, but the offer is so good that you simply cannot ignore it.

Keep it quiet. "Do not tell your employees," cautions John Warrillow, the bestselling author of Built to Sell and President of The Sellability Score.

"Roughly one in three signed 'Letter of Intent' culminate in a deal closing. A Letter of Intent is a good first step, but it is just base camp and the summit is still a long way off," he adds.

Learn what you can about the deal they have in mind but don't reveal any of your thoughts or alert your internal team. Contact your advisors - you'll want them on your side.


Business is very profitable

You feel that your impressive bottom line will attract a financial acquirer anxious to make your money their money. The valuation of your business is so high that you (and your advisors) know it's time to cash out.

Depending on the size of your business, shop for a business Broker or a Mergers and Acquisitions firm to represent your opportunity with qualified buyers. Carefully research any such agent.


Life changes

Or, you may be experiencing any of the following life changes.

  • Retirement. You're ready to enjoy the rewards of your life's work.
  • Next challenge. You're itching to start another business or participate in a new adventure.
  • Financial, emotional or health issues. An entrepreneur may be unwilling to continue to tolerate the financial pressures inherent to operating a business. Or, life changes - such as divorce, personal tragedy or illness - can understandably impact our professional interests.


The fact that you want out could be used against you. A buyer could try to push down your price because they think you have to sell.

"Have your Mergers and Acquisitions expert run a professional sales process that generates multiple bidders," recommends Warrillow. "A buyer who is aware there are other potential buyers at the table will be less inclined to change the price during diligence."


Favourable market conditions

A sellers' market may be enticing you to list your business for sale. "I think most business owners contemplate selling well past their 'best before' date," comments Warrillow.

So pay attention to conditions that might favour a move to sell. The economy might be red-hot, or you might own a business in a high-demand category sought by strategic buyers - like a tech company that develops mobile applications.

You may never sell your business. But, if you do, be sure to surround yourself with qualified advisors with legal, accounting, finance, wealth management, banking and ownership transition expertise.

Contact your Scotiabank Small Business advisor to access experts, advice, tools and resources.

Should you sell or should you stay? What are the pros and cons to selling your beloved business? Please share your comments below.

By Roger Pierce