The Best Time to Sell Your Business Was 18 Months Ago

Business owners almost universally sell later than optimal. They wait until they're emotionally ready, personally burned out, or the business has started to struggle. By then, the best window has passed. The owners who time exits best are the ones who sell when everything feels too good to leave.

This isn't about market timing—it's about business trajectory timing. Buyers pay multiples of earnings, but they pay higher multiples for growth. The same $2M EBITDA business is worth far more when it's growing 20% than when it's flat or declining.

The Timing Problem

When Owners Want to Sell

Most owners decide to sell when:

• They're burned out and ready to move on
• Growth has slowed and the business feels harder
• They've had a health scare or life event
• A key customer left or something went wrong
• They've "had enough" and want to cash out

When Buyers Want to Buy

Buyers pay premium prices when:

• The business is growing strongly
• Management is energized and executing
• Customers are stable and expanding
• The market opportunity looks compelling
• Nothing is obviously broken

Notice the gap? The seller wants out when things are hard; the buyer pays premium when things are good. The windows rarely overlap.

Why Waiting Costs Money

Multiple Compression

A growing business might trade at 6-7x EBITDA. A flat business trades at 4-5x. A declining business might be worth 3x or less. The same underlying earnings become worth far less as trajectory changes.

Same EBITDA, nearly $8M difference in value. Waiting for "one more good year" often means selling into declining trajectory at a lower multiple—negating any additional earnings.

Earnings Decline

Beyond multiple compression, waiting can mean lower actual earnings. The founder's energy wanes, key people leave, customers drift, and competition intensifies. What was $2.5M EBITDA becomes $2.0M, further compounding the value loss.

Personal Opportunity Cost

Each year you wait is a year of stress, work, and risk. If you could have exited with $15M three years ago and invested it conservatively, you'd have $18M+ today without the daily grind. Instead, you're still working—and possibly watching value erode.

Market Cycle Risk

M&A markets cycle. Good markets feature abundant capital, competitive bidding, and premium valuations. Bad markets feature scarce capital, picky buyers, and depressed multiples. Waiting exposes you to market risk you can't control.

Why Owners Wait Too Long

"Just One More Good Year"

The logic seems sound: if we're doing well, another year will add to our value. But the additional year rarely produces what's expected. Growth slows, unexpected problems emerge, or the owner's enthusiasm fades. The "good year" becomes average.

Identity Attachment

For many founders, the business is their identity. Selling feels like losing part of themselves. They delay until external circumstances force the decision—which often means suboptimal timing.

Fear of Regret

"What if it keeps growing?" The fear of selling before peak keeps owners holding. But peaks are only visible in hindsight. Waiting for the peak usually means selling past it.

Process Aversion

Selling a business is exhausting—months of due diligence, negotiations, and uncertainty. Owners avoid starting the process because it sounds painful. By the time they accept the pain, the optimal window has closed.

Signs the Window Is Now

• Strong recent performance: Trailing 12 months look great—this is what buyers will pay for
• Growth trajectory intact: Year-over-year growth continues, even if slowing
• No major problems on the horizon: No known customer losses, regulatory issues, or competitive threats
• Key people are stable: Management team is intact and committed
• M&A market is active: Capital is available and deals are getting done in your space
• You're thinking about it: The fact that you're considering exit suggests readiness is approaching

If several of these are true, the window may be now—even if you don't feel ready. Waiting until you feel ready often means waiting too long.