Even business leaders who have done everything right find that a successful transition takes preparation, patience and time. “No matter how long you have been thinking about transitioning, a business sale is a not an event. It’s a process that requires sustained effort and execution,” says John Hluck, Senior Vice President at SunTrust Bank.
According to a recent SunTrust study of 532 business leaders, 8 percent say they plan to sell the business to another firm, 6 percent plan to sell to current employees and 5 percent plan to transition the business to family.
On average it takes 6 to 12 months to complete the sale of a business ("Know when It's Time to Sell Your Business", 2013), not including preparation. If you are considering a transaction or transition within the next few years, the time to start is now.
Getting your Business Ready
No one wants to sell at the wrong time. You can mitigate some of the timing risk through analysis that studies:
Overall Market Conditions
Start by re-looking at the overall market conditions for your industry. Selling always takes longer than you think, so think about conditions today as well as projections for the next few years. Mr. Hluck advises, “Get a feel for the appeal of businesses in your market by looking at recent, comparable sales in your industry. Look for strategic industry players who have an appetite for a company like yours as well as for private equity and investor groups active in your market.”
Layer on your business performance and trends. Mr. Hluck continues, “Ask yourself if your business is positioned to take advantage of market conditions. Will a prospective buyer find your plans and strategies valuable in the current and future environment? Are you poised to grow, hold steady, or show a slight decline in revenues or customer sales streams?”