When to Sell the Company
Successfully selling a business requires balancing personal and market factors, as well as accommodating unexpected developments. The following short quiz highlights the most important considerations when deciding whether now is the right time or, if not, how to exit optimally anyway.
When & How Exits Happen
Factors driving exits range from internal considerations — such as the “desire to retire,” health, and the needs of family and management — to external factors such as competition and shifting technology trends.
Exit Drivers
Deciding when to sell a business is a deeply personal choice. For some owners, no matter how strong the evidence for selling is, the idea feels impossible. So they wait, and, as a result, over one-third of those who go to market are, at the end of the day, compelled to do so.
The data backs this up (see chart below): while 63% of exits are voluntary (led by retirement at 27% and new opportunities at 20%), a striking 37% of owners find themselves dealing with sudden shocks like health crises (12%) or partnership disputes (10%).
Why Owners Sell
While retirement by itself drives the most exits, it only accounts for 27%
The Exit Readiness Questionnaire
To get a better fix on your exit horizon, print this page, grab a pen, and circle your answers. The more your responses lean in one direction, the clearer the signal whether to sell now now or wait. If your results lean toward selling, speak with a trustworthy M&A advisor before investing time and money in next steps. Based on that feedback, you may still find you’re a bit early.
Finally, no questionnaire can capture every nuance of your situation. If a question seems irrelevant, simply skip it.
- You want to exploit a fleeting market opportunity but don’t have the resources.
- You’ve been thinking more about selling the company to fund a better lifestyle or new opportunities.
- You’re bringing less energy or passion to your work than before.
- External threats (tech changes, competitors, regulations) are complicating life.
- M&A valuation multiples and deal closings in your industry are up.
- You’re uncomfortable having so much of your wealth tied up in the business.
- You’d like to transfer wealth to family members in a tax-efficient way. (FYI, the lifetime estate and gift tax exemption threshold is now $15 million per individual, a new high. Using this exemption to gift your business’ equity or place it in trust will freeze value, removing future appreciation from your taxable estate. Talk to a planner.)
- Demand for your products or services is cyclical, seasonal, faddish or susceptible to tech trends.
- You’re concerned about your health or relations with co-owners.
- You’re unhappy with the direction of current economic, political, or social trends.
- Your company’s revenue exceeds $10 million.
- You no longer feel the need to prove anything.
- You have no clear successor in sight, and you’re over 60.
- You’ve received an unsolicited purchase offer. (Warning: Accepting an unsolicited bid without running a competitive process typically leaves 20% to 30% of your business’ true value on the table.)
- Your products or services could fill a strategic gap in a larger competitor’s lineup.
- Your IP may be worth more in someone else’s hands than yours.
- The Russell 2000 index has materially appreciated over the past 12 months.
- You’ve found another entrepreneurial opportunity that you’d like to pursue.
- You expect your EBITDA margin to be reliably higher starting about six months from now.
- You could complete various value-enhancing initiatives within six months (e.g., key hires, new products, an updated sales management system).
- Sales have been flat or declining, and you don’t have a clear plan to reverse that within a year.
- M&A deal volume and values move in industry cycles. If yours is in a down phase, you lack the time or resources to wait it out.
- You’d find a recession lasting as long as five years difficult to weather, whether for reasons of age, health, or patience.
- You have no remaining value-adding projects you both want to complete and could finish in reasonable time. (For a list of such projects, see Quick Projects to Increase Value Before Sale and Bigger Projects That Increase Value More.
Now count your “Yes” answers. More Yes votes indicate a stronger sell signal.
Last Thoughts
There are many reasons to delay: not knowing what you’d do next; believing no
one else can run the business as well as you; finding great enjoyment in being your own boss; thinking you first need to grow the business more; or believing you can handle the challenges without outside help.
All of these perspectives can be valid. But entrepreneurs, who are wired to push through adversity, can sometimes miss the benefits that new ownership unlocks. That may be simply because they haven’t seen enough examples of successful exits. Or they’re narrowly focused on the next business objective.
Since, at the end of the day, nearly four out of ten owners must sell, waiting until you are emotionally “ready” may be a gamble. The best insurance policy is to build a sale-ready business before you decide the time is right. To many business owners’ surprise, the best time to sell may be when they’re saying, “not yet.”
Contact us at (650) 353-3353 or by email for more suggestions on how to prepare your company for a safe, successful sale. And check out our M&A Resource Hub for dozens of articles on growing and preparing a mid-market tech company for sale.
Revised 8/31/26. © 2026 Kuhn Capital, Inc. All Rights Reserved.
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Posted by:
Ryan Kuhn
08/31/2026
Ryan Kuhn is the founder of Kuhn Capital (bio). This article is not the product of AI. AI is a product of this article.
