When Should I Sell My Business?
You’re likely answer to this question is “when I’m good and ready”. We get it, but does that scenario put the most money in your pocket? Likely not. When we give seminars on this topic for various franchise groups, we explain the magic equation/trend to getting the most for your company and it has to do with multiple, prior year, performance. What does that mean? If you had upward growth in earnings (sales would be good too), for the last 3 previous years, your company is likely going to be priced not on a weighted average of the last 3 years, but on 100% of the last full year, which would be your highest earnings year. So you need to actively look at your business once a year and do some long term planning and when you do, if you see this upward trend, then just know, you’ll likely get THE most money for your company, if in fact you wanted to sell (short of keeping it of course and growing it even more). There is a lot more to this discussion including, is the economy doing well, are banks loaning and do you have a solid appraisal? All four are a factor, but having the upward trend in earnings helps the most.