The right time to sell depends on your personal objectives, business readiness and the availability of suitable buyers and finance. Preparation can improve your options, but neither profitability nor a strong exit plan guarantees a buyer or a particular price.
By Tony Vaughan · Published · Last reviewed
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With the appointment of a new prime minister and the prospect of a ‘no deal’ Brexit causing uncertainty across the UK,
it is understandable that business owners are concerned about whether market conditions will affect their businesses sale, many will find themselves thinking “is now really the right time to sell my business?”.
This September 2019 article discusses sale timing in the context of Brexit uncertainty. Preparation can improve your options, but cannot give you control over buyer demand, finance or market conditions.
Why businesses consider acquisitions
First let’s take a step back and look at why people buy businesses. One of the top priorities for most businesses is the need to grow, evolve and move forward. How do you grow a business? Essentially there are two ways to develop a business; organic growth or growth through acquisition.
Organic growth may involve marketing, recruitment and developing existing customer relationships. It carries execution and financial risks, just as acquisitions do.
Some businesses decide to fast track growth by acquiring a complementary business, this is normally a higher risk strategy that involves much time and financial resource, but if successful, the acquirer is rewarded with a large leap forward in business. A good acquisition will bring and profits, new customers, staff, new markets and territories, brands and intellectual property, the list goes on.
Acquisitions are one way businesses pursue growth, capability or market access. Whether a buyer will acquire your business depends on strategic fit, available finance and acceptable terms.
In the Brexit-era context of this article, uncertainty did not remove every reason to acquire a business. However, buyer appetite and finance availability can weaken; demand should not be assumed to withstand every market change.
Balance readiness with market conditions
Deciding when to sell requires a balance of personal goals, operational readiness and buyer conditions. A profitable business is not guaranteed to find a buyer. Use a pre-exit question checklist to identify improvements and consider the risks of selling now versus waiting.
Common questions
Does political uncertainty mean I should postpone a sale?
Not automatically. Consider how it affects your sector, buyer finance and your own objectives; a historical political example is not evidence of current demand.
Can a profitable company still struggle to find a buyer?
Yes. Price expectations, concentration risk, funding constraints and limited strategic fit can deter buyers even when the business is profitable.
What should I compare when deciding whether to sell now or wait?
Compare likely net proceeds, ongoing trading risks, improvements you can realistically deliver and the personal cost of continued ownership. Do not assume waiting will improve market conditions.
Is the Brexit discussion in this article current market guidance?
No. The article was originally published in September 2019 and its Brexit references describe that period. Assess current conditions separately before making a sale decision.
General information from our archive, not personal advice.
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