Deciding when to sell your business is one of the most significant strategic choices you will make as an owner. It blends commercial timing with personal objectives. This article guides you through the key signals, readiness criteria and strategic considerations to determine whether now—or soon—is the right time to exit.
Understanding the fundamentals
A well-timed sale is not simply about picking a date. It’s about aligning three key dimensions: your business (its performance and readiness), the market (buyer appetite, valuations, risks) and your personal situation (objectives, capacity, plans). Experts advise giving yourself ample runway—often 12-18 months ahead—to optimise value.
Key signals that it may be the right time
Here are the most common signs that indicate you should genuinely consider moving toward a sale:
1. Your business is performing strongly
When your business is growing, profitable, and future-facing, you’re in the strongest position to attract good offers. One adviser notes:
“Periods of strong growth are often the ideal time to take your business to market.”
Likewise, other sources emphasise the need for momentum in the business ahead of a transaction.
2. Market/sector conditions are favourable
Timing the market matters. If valuations in your sector are elevated (for example due to consolidation, investor interest or favourable tax regime), you may maximise your return.
3. You are ready personally
Many owners push on past the point of peak performance because they aren’t ready personally to exit. But if you’re feeling fatigued, distracted, or ready for a new chapter, that is an important sign.
4. Structural or risk-factors are starting to bite
Sometimes the right time comes because the risk clock is ticking. Examples:
- Key customer concentration that is increasing risk.
- Significant capital investment looming (working-capital or capex “cliff”).
- Incoming competitor or disruptive technology that could erode value.
- Potential tax or regulatory changes that could reduce your net proceeds if you wait.
5. You have buyer interest or credible lead time
If you’ve started to generate unsolicited interest (or you believe you could), that’s a positive sign. However, merely having interest doesn’t guarantee you should sell—it must align with business readiness and personal objectives.
When you may not be ready
Just as important as knowing the right time is recognising when it might be premature to sell. Some red flags:
- Your business is in the middle of a growth surge and has significant upside remaining. Waiting might deliver a higher value.
- Market valuations are depressed, or buyer appetite is weak. Trying to sell in a down-cycle often forces compromise.
- You have deep emotional attachment and are neither mentally nor operationally ready to detach.
- The business lacks a management team, operational structure or the financials look weak. These will limit value and may derail a sale.
A checklist for readiness
Use this as a practical guide for assessing sale-readiness (you can also use our business sale timeline tool for a more bespoke perspective):
Business readiness
- Financials: Stable performance, credible forward outlook, good margins.
- Operational: Key roles covered, processes documented, low dependency on you.
- Customer & revenue profile: Well-diversified, with secure key accounts.
- Growth momentum: You have a strong narrative for the buyer about future growth.
- Risk exposure: Minimized dependency, midpoint transition risks identified.
Market readiness
- Sector multiples: Are they elevated or improving?
- Buyer ecosystem: Are strategic buyers or private equity showing interest in your segment?
- Tax/regulatory landscape: Are there upcoming changes you should beat?
- Timing horizon: Have you allowed sufficient lead time (12-18 months) for preparation?
Personal readiness
- Clarity on your post-exit life: What will you do next? Do you have a plan?
- Risk tolerance: Are you comfortable passing control and the unknowns that follow the exit?
- Emotional readiness: Do you still enjoy running the business or are you ready to move on? “When you’re bored … that’s it.”
Strategic timing considerations
Here are a few deeper points that often decide the difference between a good exit and a great one:
Don’t wait until you have to sell
The best outcomes often occur when you choose to sell, rather than being forced to. If the business deteriorates, buyer interest wanes and price falls. As one owner put it on a business forum:
“It’s best to sell a business when your sales are through the roof than the opposite.”
Think 12–18 months ahead
One advisor recommends planning well in advance: “Start thinking about a sale up to 18 months in advance…” This gives you time to sharpen the business, align stakeholders and position strategically.
Use growth momentum as a value lever
Buyers pay in part for future potential. If you’re able to show a credible growth trajectory, the valuation can be significantly higher than if you sell after performance has peaked and declined.
Personal objectives matter more than market timing alone
You might find perfect market conditions, but if you’re not ready personally, you won’t extract full value. A firm states:
“The most important factor … Your personal circumstances.”
Tax and regulatory windows can trigger action
Especially in the UK context, upcoming tax changes or regulatory shifts can define the decision-window. For example, changes to capital gains tax or business asset disposal relief can materially affect your net takeaway.
Practical next steps for you now
In the context of your business and ambitions, here’s what I suggest you do next:
- Run a mini exit-readiness review using CJPI’s exit timeline tool.
- Define your target price and rate the business against the criteria above to assess how far you need to close any gaps. You may need some advice to determine this, which you can get for free from CJPI’s sell-side team.
- Build a 12-18 month action plan to enhance value: sharpen performance, strengthen management, document processes, reduce key-person dependency.
- Engage key advisors early (M&A specialist, tax adviser, corporate finance) to ensure you understand timing, options and structuring implications.
- Clarify your personal transition plan: what will you do post-sale? Are you ready mentally and financially?
- Monitor sector/market signals and have in place the triggers that will prompt you to go to market when conditions and readiness align.
