Entrepreneurs and business owners thinking about selling their companies often equate timing with value. The concern goes something like this: Sell too soon, and your business may not be ready. Sell too late, and you may miss your chance to receive the highest payout.
Basing your decision solely on your perceptions of the M&A market is a big mistake. When it comes to selling your business, there is no magic moment. Instead, you will carefully need to consider certain internal and external signs.
Here’s an obvious clue: if you have been considering the question for weeks or months, it may be time to sell. If, on the other hand, you have no idea whether you’re prepared to engage in a merger or acquisition, consider the following motivating factors:
You’ve lost the passion for your business or industry. You’re disorganized, unmotivated, and ill-tempered. You constantly postpone important decisions, neglect deadlines, and reschedule meetings.
2. Your Age
You are fast approaching or have already reached retirement age. You lack the energy you once had and feel out of touch with your younger employees and colleagues. You’re concerned about your health. You want to spend as much time with your family as possible.
3. More Work Than You Can Handle
Business has become too busy. You fear that you’re not capitalizing on lucrative opportunities or that you’re failing to meet client or customer demand. The quality of your work has been suffering.
4. Less Work Than You Can Handle
You have too much time on your hands. Your team seems underutilized. You suspect someone else might be able to steer your business in a better direction.
5. Your Business Has Turned Into a Dinosaur
You no longer recognize your line of business. You’ve realized your business is years late in adopting new, expensive, and complex technology. You and your team are unable to keep up with recent trends and disruptions that have fundamentally changed your industry.
6. There’s Money on the Table
You think your business might be worth millions, or at least hundreds of thousands. You want and need the money. You have put in the work over the years, and you’re feeling ready to cash out.
7. Interested Parties
You’ve been in contact with a potential buyer, or several. Your industry is in merger mode: left and right, you’re watching businesses similar to yours—in terms of size and capability—get snatched up by large conglomerates.
8. A Chance to Start Something New
You’re eager to jump to the next stage of your life. You’re feeling inventive and creatively inspired, and thinking “big picture” thoughts. At the same time, you’re excited at the prospect of your business entering its next phase—with or without your involvement.
If any of the above sounds familiar, it might be time to sell your business. Get started with my guide to pre-transaction planning.
ABOUT MICHAEL N. MERCURIO
Business attorney and M&A lawyer Michael N. Mercurio serves as outside general counsel on matters related to business law, M&A, and real estate law. As a strategic partner to firm clients, Mr. Mercurio regularly counsels entrepreneurial individuals and assorted entities on all aspects of business and commerce, with a core specialty in mergers and acquisitions—both from the sell side perspective and buy side perspective.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 120 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our eight offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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