Sell while it is growing, not when you are tired

Are you waiting to sell until you feel ready to stop?

It sounds sensible. You built the business, so you choose the moment. Most owners picture that moment arriving gently: the energy runs down, the kids are settled, the time feels right.

The trouble is what tends to happen to the business in the same years. When the owner is tired, the business usually knows. New ideas slow, the best staff look elsewhere, growth flattens. So the question of when to sell your business gets answered by your energy, and the buyer reads the answer in your figures.

It is the most ordinary exit story there is. The owner is ready just after the business stopped being at its best.

When to sell your business: on the way up

Plan the sale for a time when the business is still growing and you could happily run it for another three years. That is the window buyers pay most attention to, and it rarely matches the day you feel finished.

The reason sits in how a price is formed. A buyer is not paying for what you earned. They are paying for what they expect to earn, and they draw that expectation from your recent trend. Three years of rising profit gives them a slope to extend. A flat year at the end gives them a reason to pause. A falling one gives them a reason to wait and see.

A growth rate on its own is not money, as I wrote in you cannot bank a growth rate. But a buyer will pay for growth that is backed by profit, records and a team that can keep it going after you leave.

So the timing question becomes practical. Is profit still rising? Is there a pipeline of work the buyer can see? Do you still have the energy to run a sale process and keep the business growing through it? If all three are yes, the window is open.

Selling on the way up has a price of its own: the best years go to someone else. Some owners will watch the next owner do well and wish they had waited.

That is a real cost. The alternative is selling after the peak, and nobody picks the top. An owner who waits for it usually sells on the way down, with a buyer pricing the decline.

Sold rising, growth is the buyer's reason to pay. Sold tired, the missing growth is the buyer's reason to wait.

Mailchimp sold at full strength

Mailchimp was founded in Atlanta in 2001 and grew for two decades without venture capital. TechCrunch called it famously bootstrapped. In 2019 it said it was on track for about $700 million in annual revenue, and it was reported to have earned around $300 million before interest, tax, depreciation and amortisation in 2020.

In August 2021, Bloomberg reported that Mailchimp was exploring a sale at a valuation above $10 billion, with interest from large technology companies and private equity. On 13 September 2021, Intuit announced it would buy the company for about $12 billion in cash and stock. Mailchimp then had more than thirteen million users and eight hundred thousand paying customers.

TechCrunch noted that Intuit was spending about a tenth of its own market value on an email marketing company. Intuit was paying for where Mailchimp could go next, inside a larger business.

The common telling is that patience paid off: twenty years of slow building, rewarded at last. Patience built the business. Timing set the price. The founders tested the market while the business was profitable and more than one kind of buyer was interested, and Intuit's final price came in above the figure first reported.

They did not sell what was left after the energy ran out. They sold the momentum while it was still theirs to sell.

Why I time a sale this way

I time a sale by the business's curve, not by my own fatigue.

I have raised more than $65 million across three rounds for companies I worked with. Across those raises, investors looked at the direction of the business before its size. A rising line earns a longer conversation. A flat one earns polite questions.

Buyers of whole businesses read the same line. So every quarter I check the trend and ask a blunt question: if a buyer saw this line today, would they want to extend it?

It will not find the perfect moment. It does stop me from mistaking my own tiredness for the market's signal.

Do this before Saturday

Pull your annual profit for the last five years and draw it as a simple line.

Before Saturday, look at the last two points and answer honestly: is the line still rising, and would you happily run the business for three more years? If both answers are yes, call your accountant about a sale timetable now, while the window is open.