Much has been said about the “ideal time” to sell a company: from macroeconomic conditions to company performance, including sector and market trends. All of these elements are critical to maximizing the value of the sale. However, often the actual decision to sell arises from more personal than strategic factors.
Below, we explore how external and internal factors can align to guide a business owner toward the best time to sell.
Favorable macroeconomic conditions
A stable and growing economic environment generates confidence for both buyers and sellers. Low interest rates, controlled inflation and an expanding Gross Domestic Product (GDP) are ideal conditions, as they support a healthy and active market in which transactions tend to be completed at better prices. Needless to say, in Argentina there are issues such as the “exchange stocks”, among others. Not being able to freely transfer dividends abroad is a complex restriction. However, the ideal sale cannot always wait for the perfect economic moment, especially if personal factors dictate a transition.
Positive trends in the industry
Being in a sector that is going through a growth cycle or that attracts the attention of investors and strategic buyers is a strong incentive. Industries that exhibit innovation and expansion tend to have greater acquisition activity, which increases sales opportunities and prices. However, regardless of the industry trend, the owner’s personal needs and goals may be the real driver for considering a sale at this time.
Company performance and prospects
The company must be in a good place, with a solid trajectory of revenue and growth, and with promising prospects. A track record of good results, along with clear growth potential, will attract buyers interested in the stability and future of the company, generating competitive interest and often better prices. But it is also true that, in many cases, owners reach a point of exhaustion or loss of interest, where selling becomes the most sensible option, regardless of the positive numbers.
Abundance of capital in the market
When there is an abundance of capital from investors, strategic buyers and financial entities, the market becomes more dynamic and buyers are willing to pay higher prices. In these times of high liquidity, competition between buyers can increase valuations. However, waiting on this factor alone may not be feasible if the owner is ready to move on and feels that his or her time has come.
Activity in the mergers and acquisitions market
M&A activity reflects general market conditions and the willingness of buyers to acquire companies. In an active market, transactions are frequent and valuations are more interesting. This usually happens when the other factors mentioned are aligned and create an attractive environment. However, for many entrepreneurs, personal disposition and emotional preparation are as important as market conditions.
Personal factors that determine when to sell
Beyond market conditions and strategic factors, there are deeply personal reasons that are often the true drivers of the sale decision. Among these personal factors are:
- Owner satisfaction and exhaustion – corporate relationships: Many entrepreneurs reach a point of exhaustion or loss of enthusiasm, and selling the company allows us to close that stage and avoid a situation of burnout. Sometimes, exhausted corporate relationships.
- Personal goals, family goals, health issues: The desire to dedicate time to family or other personal projects is often a powerful reason. For many owners, selling represents the opportunity to achieve a balance that until now the business did not allow. Sometimes there are health issues.
- Emotional preparation for the sales process: Selling a business requires emotional and mental commitment. Those who feel ready to take this step can better manage the negotiation process and make strategic decisions without doubt or regret.
- Reflection on legacy and impact: For many, the company is part of their legacy. The decision to sell also involves finding a buyer who respects the values and impact the company has had on its sector or community.
- Projects for the future: Having a vision of what you want to do after the sale helps reduce anxiety and avoids the feeling of emptiness that can appear when leaving the business behind.
Conclusion: aligning strategy and personal well-being
Selling a business is one of the most complex decisions an entrepreneur faces, and while economic and strategic factors are fundamental, personal reasons are often the deciding factor. The best sale occurs when market conditions and the owner’s personal desires are aligned.
The true “best time” to sell a business depends not only on the market, but on the owner’s disposition and life goals. Selling when you are at peace with that decision allows for a smooth and satisfying transition, knowing that it is being done at the right time for both your business and your personal life. It is not always possible.
Consultant specialized in Exit Planning and author of “The Reinvention of the Owner”.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
