As Seen on Atlanta News First: When Is the Right Time to Sell Your Business?

Sydney Stalworth: Well, for many people, their business is not just a job. It is their biggest asset, and their best shot at retirement. So how do you know when it is time to walk away and cash out? Atlanta News First's Brooks Baptiste talked with Torey Hinkson, President and Owner of First Choice Business Brokers Peachtree, about the questions every business owner should be asking before they make that move.

Brooks Baptiste: So how is someone supposed to evaluate if their specific industry is in a good position for a sale right now?

Torey Hinkson: The first thing I say when talking about the market is that you have to accept you do not control it. You have to be aware of it, because you do not exist in a vacuum, but you do not control it, and it will change over time. So with respect to how your particular industry is being impacted by the market, there are a lot of data sources you can look at. Industry trade associations, things like that. But really, you have to look at your own business. Talk to your customers, talk to your suppliers. How are they feeling? How are different market forces impacting them? That is going to give you the best insight into what may be coming.

Brooks Baptiste: Given your expertise in what you do, how is it that you help owners figure out whether they are emotionally and maybe financially ready to actually let go of their business? Because for some people, that is all they have. That is their baby. When you build something, it is hard to let it go, but there may come a time where it is necessary.

Torey Hinkson: Absolutely. The first thing is to recognize that only a business owner can decide for themselves if it is the right time to sell. So what I try to do is talk to them about both their business, what it is worth, and whether they are ready. The way I do that is by guiding business owners through three questions. One, is the market ready, which we just talked about. Two, is your business ready? That is how is it performing and why, and can it perform without you. And lastly, are you ready personally? Part of that is understanding what the transaction means to you. You talk to your tax accountants and lawyers and financial planners to figure that out. Can you personally afford to sell your business and live your lifestyle? But the other piece is, like you said, it has been ten, twenty, thirty years. This is your baby. It gives you purpose. What are you going to do? I have had owners who sold their business, had a good transaction, it worked for them financially, and they do not necessarily need to work. But you have to get up every day and have some purpose and do something. So think about that ahead of time. Whether it is philanthropic or charitable, you want a cause that aligns with your values and that you want to pour yourself into.

Brooks Baptiste: Real quick, just tell us. If somebody is on the fence right now about whether they should be selling, and they say, you know what, I think I want to do it, what is their first step supposed to be?

Torey Hinkson: The first step is to reach out to professionals to understand the value of your business. What it might sell for in the current market. And then have another set of professionals help you understand what that means for you personally. Part of it is financial. Can you support your life, your family, your lifestyle? You are pulling a certain amount of income out of the business on a monthly or annual basis. If you sell that, do you intend that to be your source of income going forward? If so, what does that look like? And Uncle Sam shows up to the table and he wants his cut, which gets complicated in business sales. But there is that purpose piece as well. So do not let anyone talk you into it. Take your time, really understand what your business is worth, and think about what you want for the future of the business. I have had business owners who say, I only want to sell to someone who has these values, who is going to run the business the same way and keep taking it in the same direction. I have had other people who say, I do not care, as long as the money is green. And everything in between. But then you have to dig in on the emotional side and ask, am I ready? Am I ready to let go? If you built this, and you sell it and someone else is running it and you see it, how are you going to feel?

Brooks Baptiste: You cannot say, I want my business back. That is not how it works. You sold it. All right, Torey Hinkson, thanks so much for that great insight, as always.

Torey Hinkson: Thank you. It is great to be here, Brooks.

Brooks Baptiste: We appreciate it.