Should I sell my business given the current economic outlook?

10 Aug 2022

Given the current geopolitical situation, rising inflation, and the cost-of-living crisis, many business owners are asking – is now the time to sell my business?

The answer is – it depends.

The decision to sell a business should be based on a wide variety of factors, not just external. Before making a decision, consider your personal and financial situation, the type of business you have, and your individual goals.

To sell or not to sell

Ask yourself, why you are thinking about selling? Are you reacting to a recent news and events or is there more to it?

Maybe your intention was always to sell after a set timeframe, or you are planning your retirement. Perhaps you’ve fallen out of love with running your business or are just more excited about a new venture. These are all valid reasons to start considering a sale, regardless of external factors and economic outlook.

If you are considering a sale purely because of an impending economic crisis, you should give serious thought to if and how badly your sector will be impacted, and whether you have the means (cash and grit) to ride it out. A temporary decline in financial performance will certainly impact the value of your business but it should be just that – temporary. You might also have to delay a future sale for a few years while you demonstrate recovery, but if there is no time pressure then this shouldn’t be a reason to rush.

If, like many out-of-town private health clinics, you have seen record performance in in 2021/2022 post pandemic, now could be a great time to market your clinic. While the healthcare sector is usually quite defensible, no one can predict market peaks and troughs. Generally, the best time to sell a business is when it’s doing well, you have time to run a full and strategic selling process, and there is no financial pressure on the business.

If you want to get a valuation or talk through your options, we are here to help. Conversations with us are always confidential and we love giving honest, helpful advise to industry colleagues.

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