When should you sell your business? At face value, the answer seems so obvious: the moment you can make the most money. But, as in all parts of life, it isn’t that simple.
Ultimately, you will never know the best day to choose. Many factors come into play, such as market trends, buyer desire, and those sticky little details like your profitability. But, as of this moment there are two things you can know for sure. You know what day today is, and you can choose the Drop Dead Date.
Every day you are another day older. If you have a dream of retiring rather than being entrepreneur to the grave, you need to pick a Drop Dead Date. Do this by writing down the very last date on the calendar that you are committed to selling your business. This is your absolute, stick a needle in your eye, swear on your soul, commitment to the day you will no longer be with the business. This promise is so great, that you must agree that even if you can’t get a single $1 for the company that day, you will still walk away.
Once you know the Drop Dead Date, you need to start working on the selling of the company about three to five years in advance. I know that is a lot of time… but you need it. You must have clean financials, clear out your debt, show positive growth trends, and be the leader in your niche. You need to identify likely buying candidates and start showing a little leg, if you know what I mean. And you surely need to find a broker to facilitate the sale.
The Drop Dead Date ensures that selling your business isn’t a knee jerk reaction. It forces a clear path to the biggest financial windfall of your life.
By Mike Michalowicz, Author of The Toilet Paper Entrepreneur
