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Should I Sell Now Or Try To Make My Business More Profitable First?



I hear this question a lot. Is it better to sell now or should I wait and grow the business so it's more profitable and has a higher value? The answer to this question is not simple. Sometimes selling when the market conditions are right may bring higher value to a business than selling at a later date when conditions aren't quite as favorable, even though the business is more profitable. That is why I always stress the importance of hiring a professional to assist you in diagnosing the strengths, weaknesses, opportunities and threats to your business before you make a decision to sell or try to grow your business. Mark Cuban, was once asked why he sold his business when it still had upside. He responded by saying "why would someone want to buy a business if it didn t have upside potential left?" Again, the answer to this question is not a simple one. It requires careful analysis and awareness of a variety of factors such the condition of the market within the industry at a given time, the economic factors outside the industry, future opportunities and or threats and the realities of the business itself. In my opinion his is not a decision you should make on your own.

I too have heard this question many times from sellers, typically it's right after I've told them what their business is worth. Many sellers will say, "well, we are about to do a lot of advertising and so the gross sales should go up, because of the door hangers with coupons we are going to be putting out." It's been my experience that buyers will want to look at the business sales over the last year or two, and so any month of mass coupons or other marketing gimmick isn't satisfying, because in their mind it all comes down to profitability over a significant amount of time.

I too have heard this question many times from sellers, typically it's right after I've told them what their business is worth. Many sellers will say, "well, we are about to do a lot of advertising and so the gross sales should go up, because of the door hangers with coupons we are going to be putting out." It's been my experience that buyers will want to look at the business sales over the last year or two, and so any month of mass coupons or other marketing gimmick isn't satisfying, because in their mind it all comes down to profitability over a significant amount of time.
I couldn't agree more - this is NOT a decision a business owner should make alone.

While it's true that the best time to sell is when the business is doing well, very often significant value can be added to the business. As a Certified Value Builder as well as a licensed business broker, I work with business owners in a SWOT analysis (strengths, weaknesses, opportunities, and threats) to assess the current value of the business and develop a strategic plan, with precise tactical steps, to vastly increase the value of their business over the course of 12-18 months. Then we determine if the time and expense is worth it, or if it's better to sell in the current market.

Sometimes it makes sense to list the business for sale, anticipating the value that will be realized in the next six to twelve months, and let the business "grow into" the asking price.

But, all of these decisions require the expertise of a professional business broker who also has experience and expertise in the hands-on process of business value development.

I couldn't agree more - this is NOT a decision a business owner should make alone.

While it's true that the best time to sell is when the business is doing well, very often significant value can be added to the business. As a Certified Value Builder as well as a licensed business broker, I work with business owners in a SWOT analysis (strengths, weaknesses, opportunities, and threats) to assess the current value of the business and develop a strategic plan, with precise tactical steps, to vastly increase the value of their business over the course of 12-18 months. Then we determine if the time and expense is worth it, or if it's better to sell in the current market.

Sometimes it makes sense to list the business for sale, anticipating the value that will be realized in the next six to twelve months, and let the business "grow into" the asking price.

But, all of these decisions require the expertise of a professional business broker who also has experience and expertise in the hands-on process of business value development.

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