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When is it Time to Sell Your Business?

Sunday, June 10, 2007   (0 Comments)
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A Member article submitted by Coalition Exchange Member Richard Stopa, Princpal, Bay Business Brokers

There is one forward-looking question that many government contracting business owners fail to ask themselves early enough in the life of their business. That question is, “when is the right time to sell my business?”

In many instances, the decision to sell a government contracting business is purely a personal and emotional one that is not based upon either the age of the business or the owner, the contracting marketplace or the value of the business. Sometimes a business owner is simply tired of working, seeks a new challenge or just wants to cash out.

Other times, the decision is a financial one based upon the current success of the business and the desire to sell before financial results fail. Whatever the motivation to begin thinking about selling, the most important thing you can do to ensure a successful and profitable sale is to take steps early so you can maximize your company’s value when you finally decide “It’s time to sell”.

BUSINESS CHECK
  • The optimum time to sell your business is before you are forced to do so because of financial, business or health reasons.
  • You should actively start the process at least one to two years before you want to sell the company.
  • Even if your business is new, you should begin thinking now of an exit strategy.

When should I start planning for the sale of my business?

Most business planning consultants agree the exit or business sale planning process should begin within the first two years of the business being started. Every major decision that a business owner takes to build the government contacting business should also address how it will affect the future sales value of the business when it is time to sell.

But when is the best time to sell?

The optimum time to sell is before you are forced to do so because of financial, business or health reasons. This places you in the strongest negotiating position. You should actively start the process at least one to two years before you want to complete the transaction.

More than one million businesses will change hands this year. Most of them will be small privately held companies selling for $100,000 to $15,000,000. No matter how much business experience these owners may have, the majority of them have little to no experience in selling a business. Very few of them will know what to expect or how to proceed.

All too often, owners come to a business broker/ business intermediary wanting to sell their business “now”, yet they have done nothing to position themselves or the company for the sale. Whatever stage of the business cycle your company is in now is the right time to think about an exit strategy.

About the Author

Founded by Richard Stopa, Bay Business Brokers, located in Northern Virginia assists owners of privately held small and middle-market companies successfully complete the sales, mergers and acquisitions of their companies. The company’s experience, network and proven process combine to truly help clients realize maximum value for their companies. For additional information on Bay Business Brokers please visit our web site: www.baybusinessbrokers.com or email: richard@BayBusinessBrokers.com.



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