A great business will always sell, but if you want the best price there are definitely better – and worse – times of year to put your company on the market.
Before the season starts
Most businesses are seasonal in some way, from the obvious (like horticulture) to the less obvious (like a marketing business), there are busy times and flat periods. The best time to sell is during a flat period when a busy period is impending.
If you’re in retail, you might sell in September, so your new buyer can anticipate the Christmas rush. If you’re a ski hire company, you might sell in May as the snow season approaches. Even a non-seasonal business like plumbing can have quiet periods in winter and around holidays.
When you’ve recently received fresh accounts
I’ve overseen the sale of hundreds of Kiwi companies and buyers always want to see up-to-date information and three years history – usually all in signed-off accounts. This means that right after you get your fresh set of accounts for 2018 is a good time to put your business on the market.
At a time when people are paying attention
Don’t put your business on the market at these times:
- December or early January – everyone’s away. I would recommend the second week of February as the earliest point in the year to put it on the market, and the start of November as the latest point.
- Election time – everyone’s distracted. Decisions aren’t made, people worry about changes, and nothing happens. Everything’s on hold until the new government is decided.
- During a major sporting event – again, everyone’s distracted. Rugby World Cups, America’s Cups, Olympics; wait until the palaver has subsided before making your move.
Start preparing at least six months earlier
You can plan to sell at the perfect time, but it won’t do you any good if you’re not ready to go. It takes six to 12 months to get a business ready to sell. There’s a lot involved in making the company run as smoothly as possible and in the best financial shape of its life. You’ll also need to work with a sales specialist accountant like me, your business broker and potentially your team members to create a list of possible buyers.
That means if you plan to sell your business this year or next, you need to be in the process of getting all your ducks in a row right now. Need some guidance? Give me a call.