Time to Sell Your Business?
August 2024
A Forbes article named five signs that it’s time to sell your business: 1) Your business has outgrown you, (your successor(s) have performed well but want to take the business in a new direction); 2) You have outgrown your business (you are bored and want to take on something bigger): 3) Your industry is shrinking, (turn it around and then sell it); 4) It would be advantageous to find a partner or firm to grow the business; and 5) Other ventures intrigue you (go for that exciting venture after selling your business).
These signs make sense but we’ve added a few of our own: 1) The best time to sell is when everything looks great. Sales and earnings are growing, the business is operating efficiently and the outlook is positive. This is the kind of a business that is very desirable for buyers, and thus, will give you the highest price. Although there are turnaround firms that specialize in distressed businesses, you won’t get the number of buyers that a strong business will get; 2) When you get out of bed and the thought of going to work at the business doesn’t excite you. Maybe you’d be happier fishing in Florida or traveling around the world, or spending more time with the family. This may be a sign its time to sell; and 3) When your successor, often your child, has done well in the business and is chomping at the bit to take over the reigns and you are well over retirement age. It’s probably time to pass the baton onto the next generation and enjoy your retirement.
Capital Advisors, Inc. performs valuations for a variety of purposes, including the establishment of a value for the purchase/sale of a business. We have helped numerous buyers and sellers of businesses determine a reasonable value, or range of values, for their businesses.
If you, or your client, is contemplating buying or selling a business, we have the expertise to help them establish a reasonable value.
Give us a call if we can be of assistance.
Relevant Court Cases
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In re Marriage of Heather Jo Baedke and Jon
Michael Baedke,
Court of Appeals of Iowa,
No. 23-0219,
filed August 7, 2024
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McMillan Pazdan Smith, LLC v. Donza H.
Mattison,
Court of Appeals of South Carolina,
6080 (S.C. Ct. App. 2024)
filed August 7, 2024
Recent Business Valuation Articles
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“Valuing Stocks With Earnings,”
by Sebastian Hillenbrand and
Odhrain McCarthy,
posted August, 2024
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“Understanding Private Fund Performance,”
by Kaitlin Hendrix, CFA and Mamdouh Medhat, PhD,
dated July, 2024
Recent Engagements
- Consulting regarding a company that
focuses on the distribution of building
materials on a minority interest basis
for planning purposes.
- Valuation of a member interest of an
equity investment company on a
minority interest basis for
gift tax reporting purposes.
- Consulting regarding 100% of a
niche civil engineering company on
a controlling interest basis for
purchase/sale purposes.
- Valuation of the common stock of a
general contracting company on a
closely-held minority interest
basis, a freely-traded minority
interest basis and a controlling
interest basis, for compensation
and planning purposes.
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