Are You Really Ready to Sell Your Business in 2023? 5 Questions to Ask Yourself

As you ring in the new year, you might also contemplate what the future looks like for your company in 2023. Perhaps, like many owners, you’re wondering if the process of M&A might be the next step. Selling your company offers many benefits—a cash infusion, a reduction in stress, perhaps the chance to retire. It’s also a complex process that demands significant expertise, not something you can throw yourself into headfirst while hoping for the best. A business broker can help you compare your options, develop an exit plan, and shepherd you through the M&A process. But before you do anything else, you need to ask yourself these five questions. 

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Why do I want to sell my business? 

Why are you hoping to leave? Have you had enough? Are you worried about the future? Or have you undertaken a measured assessment and determined that now really is the right time? A buyer wants to know if there’s an unpleasant surprise lurking beneath the attractive veneer of your business, so be prepared to tell them exactly why you’re leaving. 

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Am I ready to give up control? 

The next owner of your business will not operate it exactly as you have. And that’s ok. Start getting comfortable with this reality, or you may accidentally undermine the sale. There’s another reason, too, to give up control: businesses that are excessively dependent on their owners are unreliable investments. So start strengthening your management team and slowly backing away. 

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What comes next? 

Do you have a clear vision for what comes next? You need one, because your plan will help you determine what you need from the sale, and which sale terms are acceptable to you. If you’re planning a full retirement, an earnout may not be ideal, but if you intend to keep working part-time, it might be just the thing to keep you sufficiently engaged. Your vision for the future can also inspire you to keep pushing forward with the sale, rather than dragging your feet on a stressful deal. 

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How much is my business worth? 

Your business, to you, is worth all the work you've poured into it. Buyers don’t care about that. They want hard figures, and the financial projections to support them. How much is your business really worth? Work with a valuation expert now to get a clear, specific, and well-supported answer to this question, or you may encounter an unpleasant valuation surprise down the road. 

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Is now the right time? 

Every industry is different. So too with every business. One fact, though, remains universal in the world of M&A: timing is everything. If you sell when your industry is tanking and credit is inaccessible, the sale will be worth less than if you waited. Conversely, when sale prices are rising, selling now may be your best option. There is no rule that applies to each industry, so instead work with an expert in your niche who can be upfront about whether now is the right time for M&A.