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Exiting your business:
Planning the timing

The value of your business will fluctuate depending on external factors such as the state of the economy and a host of internal factors relating to your business. The earlier you start to think about selling your business, the more time you will have to get it into the best possible shape for sale and the better placed you will be for putting it on the market at the right time.

As well as considering when it would be in your own best interests to exit from the business, you should also consider the position of the business itself. For example, your business might develop better if it were part of a larger group, or there may be a time when it has achieved its maximum value. Common triggers for the sale of a business include:

your retirement, or when your successor attains a certain age or level of maturity

when the business reaches a stage that it needs an injection of additional resources to develop further

when the business is in a position to be sold for the best price

You should aim to sell from a position of strength, and good planning will help you achieve this. Timing is all important; many people fall into the trap of holding on to a business for too long, and only thinking of letting go when growth has stopped or times are hard.

One client was offered �20 million for his business. The offer came at a time when the business was riding the crest of a wave. The owner thought that the business was worth �30 million and rejected the offer. Five years later, the wave had crashed, the business became insolvent and the owner came away with nothing but debts.

Once you have decided to sell your business, you should also consider the precise timing of the sale relative to your business cycle, for example any seasonal fluctuations in the trade or the availability of year-end results.