Ken Davidson, local Kelowna accountant, gives his advice to business owners wondering when the “right” time is to sell your business.

I often get asked this question from Kelowna business owners. The reality of it is you don’t want to be the person who has to sell. What you want to do is plan for your sale. I talk to my clients about two different types of sales in business:

• Voluntary Sale
  • Typically a sale that you have planned for through succession to a family member or transitioning out to a third party.Includes death, bankruptcy, competition overtake, etc.
• Involuntary Sale
• Includes death, bankruptcy, competition overtake, etc.

You always want to be working towards a plan because the involuntary sale has the tendency to not run as smoothly as a voluntary sale. That being said, you can still plan for an involuntary disposal, like death, for example. In your business, you have to do the planning to make sure you have those bases covered.

Related: I Want To Sell My Business, What’s It Worth?

When Is The Best Time To Sell Your Business?

It’s when you plan to sell it. The longer ahead you have planned for it the better. Here are a couple specific examples of optimal points to sell your business:

• When your business is increasing in revenues and expanding
• When you have good, solid contracts in place
• When you are ready!

To give you an idea from an accountant’s perspective, I always tell my clients to give me a minimum of 3-5 years notice. As a business advisor, I can help with the numbers and help with the planning to achieve the numbers that will increase the value of the company when you go to sell it…if it’s a sellable business.

Related: 4 Steps To Getting Your Business Ready To Sell

Can Your Business Be Sold?

There are a couple questions you can ask yourself to determine whether or not your business can be sold.

• Can the knowledge to operate the business be transferred?
• How crucial is your presence to the successful operation of the business?
• Are you asking the right price? (Be realistic)

If you are thinking about selling your business in the next 5 or more years it wouldn’t hurt to have a conversation now with your Kelowna accountant or business advisor to starting planning for it.

About the Author  
Ken Davidson is a Chartered Accountant with BDO Canada LLP, with their Kelowna accounting firm. Ken specializes in helping Kelowna businesses that are in start-up mode, companies in Kelowna that are in their growth phase and are ready to take their revenues to the next level, and professionals to secure their financial future with solid investment advice. Ken is best known for his strategic planning advice that positions him as a trusted advisor above and beyond being a Kelowna accountant that gives typical tax planning advice. To contact Ken for a Strategic Business Review to learn how he may be able to help your Kelowna business, email him at kdavidson@bdo.ca.