July 26th, 2010 by

When to sell your company is one of the most important decisions facing successful entrepreneurs, particularly so-called serial entrepreneurs, individuals who like the challenge of starting up new businesses, exploring new markets – and then handing it off. Because even for those who mean to sell the business eventually, it’s a tricky question as to when and to whom – not to mention for how much!

Indeed, “when to sell your company” is one of the most sought-after of keyword searches on the world wide web these days as more and more individuals seek guidance on just what are the best conditions for a sale. Occasionally business is not so good and, frankly, one hopes to get out before things get worse.

Other times much more enticing opportunities present themselves, opportunities which require, say, extra cash right away or your full undivided attention. The reasons to sell your company are as many as the times when you could, and, even, should.

Timing is key, as can be imagined, but one general principle stands the test of time: the greatest time to sell is when you don’t have to! Desperation can make for really bad decisions, and may even scare off potential buyers. After all, when business is doing good, few owners think of selling. Businessmen and women are natural go-getters, positive Type A folks who are eternal optimists.

But the reality is that sales and profits tend to be non-linear, and perhaps rather circular! There exist inflection points where growing to the next stage of success will involve considerable risk and investment. Such times are the best for evaluating market conditions with an eye towards maybe selling the company. Having investors will actually complicate matters, so generally it’s a choice between taking on venture capital or just selling the company for cold hard cash.