Grow or Exit: Understanding When it is the Right Time to Sell Your Company

As all business owner’s know, timing is important to maximizing profits. As business owners create and analyze their exit plan it is important to forecast the owner’s exit timeline. This timeline clearly impacts the amount of value-building initiatives that can be undertaken, prior to the sale or transition of the business. 

Many exit planning advisors like to think that the exit timeline is like landing a plane. If you have a long runway, the landing is generally smoother—there is plenty of time to make adjustments and slowly transition the plane to a full stop. However, if there is a short runway, you only have time to address a few issues and the stop is typically abrupt and not enjoyable for anyone along for the ride.

The ideal timeline to meet with your professionals and create an exit plan is 3 to 5 years. With at least 3 years of sell-side preparation before entering into the final purchase agreement there is plenty of time to address issues and maximize the value of the business. Building value in a business should be the goal of every business owner. By strengthening intangible assets, an owner can mitigate risk, increase profitability, and ultimately lead to a higher valued business that is not only more likely to sell, but sell for a higher margin.  

The legal team here at Jacko Law Group, PC (“JLG”) is experienced in advising business owners through the sale and transition of their businesses. Further, JLG with their Certified Exit Planning Advisor, are able to provide support and coordination among all your professionals to ensure that you have a complete Exit Plan that seeks to maximize the value of your business upon its sale or transition.  For more information or to speak to strategic counsel, contact us today.

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