Ignore the Market Trends — You are the Only One who Knows the Best Time to Sell Your Business
Market Timing Means Nothing in the Online Business World
Entrepreneurs always have a glittering end goal in mind.
Maybe it’s to scale their way to unicorn status or leave the 9–5 grind to sit on the beach for the rest of their lives. Usually, they’re out to pursue their own goals and gain control of their destiny.
Fueled by big dreams, business owners toil away in the hope that what they build is good enough to make a profitable exit, so they can walk away from it all and finally call all the shots.
With all of their heart and mind wrapped up in the idea of selling their business, the debate surrounding the right time to sell becomes a painful one.
More than anything, the entrepreneur just wants to get it “right”, so they look for advice from other popular investments for inspiration. Seeing that so many people swear by timing the market, they try to keep the market state in mind when selling their business — to their own detriment.
There’s no magic time to sell. There’s no single right way to sell.
The only definite answer we can offer is that modeling your exit strategy off what the market is doing or what other investors are doing is the wrong move.
We’ll explain why.
Why you Shouldn’t Try to Time the Market
Market timing is a real, and contested, strategy in the investment and trading world.
According to Investopedia, market timing is based on “the act of moving in and out of a financial market or switching between asset classes based on predictive methods. These predictive tools include following technical indicators or economic data, to gauge how the market is going to move.”
While it seems like market timing has all the data to back it up, it’s generally accepted by most experts that it’s impossible to time the market.
No matter what the market academics say, there are large groups of traders who believe they’ve found the hidden trick and can time their way to sound investments. That belief system has bled into real estate, as many real estate investors watch market trends and sync their buying and selling strategy to their best guess as to what the market is going to do.
Whether it’s stocks or real estate or selling a business, timing the market is usually a terrible idea.
Trying to time a market that no one has control over is a waiting game, a reactive strategy instead of an active one. Marketing timing swallows up large chunks of productive time that could have been spent producing wealth.
Instead of looking at every up and down in the market obsessively, put that energy into goals and actions that generate money for your businesses and investments. Instead of watching trends, you can optimize operations, hire a virtual assistant, or try out SEO strategies on your site.
Any of these tactics is better than sitting around hoping for the right moment.
It’s better to build the best version of your business so that you can make the best sale, not the seemingly best-timed sale.
Ignore the Markets and Understand the “Why” of Your Exit
Maybe it sounds cheesy, but believing in your reason to sell makes a world of a difference in the outcome of your sale. You’re less likely to get distracted from committing to your sale and your priorities will be clear for the end goal of your exit.
Entrepreneurs sell for a number of reasons. They may be driven by personal reasons, like wanting to free up time to spend with their families, or may want the capital for a large purchase, like a house. They may even want to leave their business simply due to a lack of interest in running it.
Some sellers have business purposes for their moves, such as seeking capital from an exit to buy another, larger, business. They also may want to exit to pursue other business opportunities online or offline.
No matter the reason, it comes down to personal goals that can only be defined after careful introspection.
Get your “why” clear and create some milestones you’d like to achieve in, and on the other side of, your deal.
Make a real picture of your goals. Are you driven by a post-deal lifestyle shift, like location independence? Would you like to use your windfall to make a large investment or achieve financial independence?
Define your lifestyle and financial goals, then ask yourself if selling your business right now actually gets you closer to those goals.
Your Goals Will Lead to the Legions of Buyers Waiting for You
The right time to sell is always personal, and in the online business space, the market operates at its own pace.
It doesn’t make sense to consider the stock or real estate markets because they are affected by their own niche challenges and gains. If you watch for their lows and wait, you could very well miss your chance to sell to a buyer hungry for your business.
Whether multiples are going up or down in the online world, there will almost always be buyers waiting to acquire what you’ve built.
That means you don’t have to worry about timing the market. Your concern is better placed when timing your sell in conjunction with your goals.
Remember: when you sell a business, you should have a plan for all that capital you’re about to gain. Capital that can be used to supercharge the speed of achieving your goals, whether they be personal or professional. Your newly earned money can also be leveraged to buy businesses, build new ones from scratch, or dip into offline investments.
In the end, when to sell your business comes down to you and your needs, because everyone’s situation is ultimately going to be different.
Tune into what you want and tune out the market gossip to find the best time to sell your business.
