When to Sell Your Business: 3 Signs It May Be Time to Sell

Deciding to sell your business is one of the most significant decisions you’ll ever make as a business owner. But how do you know if the timing is right?

This post highlights three clear signs that it might be time to exit:

1. You have a good reason to sell.

Selling a business is more than a transaction — it’s an arduous process that requires transition planning, targeting and assessing buyers, evaluating bids, and more.

As a business owner, you need a strong reason to navigate the selling process.

Common reasons include significant life events like illness, divorce, or moving to another state. While these events don’t have to occur for you to sell, having a solid motivation is crucial. Without it, staying focused becomes difficult, which can derail the sale.

2. Market conditions favor a sale.

Sometimes, market conditions align perfectly for selling your business. Signs include:

• Higher EBITDA multiples for your industry compared to historical averages.
• A strong economy where lenders are more willing to finance buyers.
• Industry consolidation, with larger businesses or private equity firms acquiring companies like yours.

3. Your business has reached a reasonable level of scale.

While reaching a specific scale doesn’t automatically mean your business is ready for the market, surpassing $1 million in EBITDA can provide a significant advantage when selling.

In our experience, businesses at this level often have well-optimized structures that make them highly appealing to buyers. They typically have strong operational infrastructure, established customer relationships, and a proven track record of financial stability. Additionally, reaching $1 million+ EBITDA expands your pool of potential buyers.

Many qualified buyers are specifically seeking businesses in this range, as they often present a lower-risk, higher-reward opportunity. While exceptions exist, hitting this benchmark is a strong indicator that your business is well-positioned to attract competitive offers.

As you can see, deciding to sell your business involves evaluating both internal and external factors. The internal factors — your personal readiness, business operations, your transition plan — are things you’ll handle on your own. But understanding external factors — such as buyer demand and how buyers will perceive the value of your business — is better navigated with the guidance of an M&A advisor.

At Axial, we have over 14 years of experience connecting business owners with M&A advisors who help them time, prepare for, and complete their business sales. Get started by connecting with an Axial Exit Consultant, or read on for more about the factors that decide the best time to sell a business.

Three Signs It’s Time to Sell Your Business

1. You Have a Good Reason to Sell

Knowing if it’s the right time to sell starts with having a strong reason to do so. A clear reason keeps you focused throughout the process, from exit planning to negotiations. It also signals to buyers that you’re serious — without that confidence, they may walk away, unwilling to invest time in a deal that might not close.

So, what’s a good reason to sell? Common reasons we encounter from motivated and serious buyers include, but aren’t limited to:

Retirement

Retirement is a major motivator for business owners. If this is your roadmap to sell, make sure you know what retirement will look like for you. This includes understanding how you’ll spend your time post-sale and ensuring you have the financial resources to maintain your desired lifestyle after retirement.

Outgrowing Your Business

If you’re losing passion for your work, or a new venture excites you more, selling your company might be the right choice.

Alternatively, if your existing business has reached a point where you no longer feel you have the skills to take it to the next stage of growth, it might be time to sell.

Significant Personal Events

These events could include a divorce, relocating the family, dealing with health issues (either your own or someone close to you), etc.

Burnout

You may be experiencing burnout. Ideally, it won’t come to this, but that’s not always the case. If you’ve reached a point where continuing on as a business owner doesn’t seem feasible, working toward an exit might help you regain a sense of control and purpose.

We’ve created a business exit timeline to show you exactly when to start the process based on your goals. If burnout is weighing you down, having a clear exit date to work toward can be a powerful motivator, turning uncertainty into a plan you can act on.

It can be difficult to accept that it’s time to sell, especially when personal events like a divorce or health issues prompt the decision. It may feel like you’re being forced to step away sooner than planned, which can be emotionally challenging. However, taking time to mentally and emotionally prepare for the sale can make a significant difference. Approaching the process with clarity and focus will better position you to secure the best outcome for both yourself and your business.

One way to build emotional buy-in and confidence around the decision to sell is to have open conversations with family members and loved ones. Discuss what selling your business will mean for you and how it will affect those closest to you — both financially and in your day-to-day life.

Here are additional resources to conceptualize selling a business:

• Business Transition Planning
• 1,000-Day Exit Plan
• Selling a Business Checklist

2. Market Conditions Favor a Sale

Timing your business sale isn’t just about when you’re ready — it’s also about when the market is. Your business’s value depends on what a buyer is willing to pay, influenced by factors like company size, historical performance, and broader market conditions.

Here are three key market signals that suggest it might be a great time to sell:

• High EBITDA multiples from recently sold companies
• High buyer demand
• Lenders willing to finance acquisitions

High EBITDA Multiples from Recently Sold Companies

EBITDA (earnings before interest, taxes, depreciation, and amortization) offers a clean snapshot of your business’s core profitability, measured before any deductions, taxes, financing, or non-operational factors.

Prospective buyers use this to assess cash flow, understand your company’s suitability for a debt-financed acquisition, and easily compare it to others.

An EBITDA multiple represents how many times your business’s earnings are multiplied to determine its total value.

It reflects how much buyers are willing to pay for your business relative to its earnings. By researching EBITDA multiples of recently sold companies in your industry, you can estimate a reasonable valuation range for your business.

For example, if your business had an EBITDA of $2M and comparable companies sold for multiples between 5x and 7x, your business could be valued between $10M and $14M.

EBITDA multiples can vary between individual companies, but industry trends provide insight into market direction. When more companies sell for higher multiples, it indicates an upswing, giving you the opportunity to maximize your sale price.

High Buyer Demand

Buyer demand can fluctuate based on market-driven factors.

It tends to peak when certain industries offer more growth and profit opportunities. For example, sub-sectors within healthcare — like home healthcare services — are especially in demand due to an aging population.

Demand also rises when your industry is fragmented and ripe for consolidation, like with HVAC companies and veterinary clinics. During industry consolidation, businesses with the scale to absorb smaller companies or infrastructure that integrates easily into larger ones often see higher demand, providing owners with access to a broader and more competitive buyer pool.

Lenders’ Willingness to Finance Acquisitions

Even if your business has been profitable for years, selling it can be challenging without buyers having access to financing. The availability of funding significantly affects both the speed and success of the transaction.

Since many buyers rely on debt to finance acquisitions, lenders’ willingness to provide loans is a key factor. In a strong economy with more money in circulation, lenders are more likely to offer financing, expanding the number of potential buyers who can secure funding.

While it’s important to understand the wider market conditions as you approach a business sale, quantifying their impact on your company’s value can be challenging. M&A advisors and business valuation experts can assess your business in this wider context.

Further reading: How much can I sell my company for: Insights for business owners

3. Your Business Has Reached a Reasonable Level of Scale

There’s no magic EBITDA figure that guarantees a successful business sale, but businesses reaching the $1 million EBITDA mark generally have a higher chance of securing a better deal.

At Axial, we’ve found that businesses with an EBITDA of $1 million or more attract a stronger pool of qualified buyers. In addition to search funds and individual investors, private equity firms, strategic buyers, and family offices see these businesses as long-term investments, justifying a higher sale price.

Such businesses typically reach this milestone by building strong infrastructure, which is often the most attractive feature to buyers. To hit the $1 million mark, companies usually have a solid team (not relying solely on the owner’s expertise) and robust customer relationships. This stability ensures that prospective buyers can expect a smoother transition post-sale.

For business owners with flexibility, growth may be a reason to delay the selling process. Small business owners might wait until their company reaches a more attractive stage, while larger companies may hold off until they approach $2 million or $5 million in EBITDA. If you have the skills and resources to invest, this can maximize your business’s value to a broader pool of buyers.

In conclusion, there’s no one-size-fits-all formula for deciding when to sell, but evaluating your exit from multiple perspectives can significantly impact your decision and the deal you negotiate.

You can consider selling your business when:

• You’re committed to the exit and have the endurance to navigate the M&A process.
• Your industry is thriving, or you can exit before a downturn makes your business harder to sell.
• Your business has reached a significant growth milestone and is ready for a smooth transition.

Once you’re certain about the timing, you can begin the M&A process and engage with buyers.

To achieve your desired exit date and deal terms, avoid these common mistakes:

Mistakes to Avoid When You’re Planning to Sell Your Company

Failing to Plan for a Sale

Planning for your sale should be a thoughtful, gradual process that aligns with your business’s natural growth — not a rushed checklist in the final year before retirement.

By spending years identifying potential management team members, transferring knowledge, and maintaining detailed financial records, you’ll set yourself up for a smoother transition from ownership.

This advanced planning also includes evaluating your wealth (either alone or with an advisor). Knowing the total value of your assets, investments, retirement benefits, and liabilities will help you identify the gaps you’ll need to fill to ensure your business provides the funds to support your desired lifestyle. With this knowledge, you can make more informed, exit-oriented decisions as you approach your sale.

Further reading: Business transition planning: 3 phases of a successful exit

Handling the M&A Process Alone

In most cases, securing a successful business sale is easier when you work with an M&A advisor rather than handling negotiations with buyers on your own.

Owners who attempt to manage the M&A process independently often struggle to:

• Organize and prepare essential documents like financial and cash flow statements
• Accurately value their business
• Market their business effectively to attract the right buyers
• Reach a broad enough network to find the most qualified buyers
• Evaluate LOIs and negotiate the best deal terms
• Maintain confidentiality to ensure employees or competitors don’t learn about the sale before an offer is finalized

Plus, owners often underestimate how time-consuming the M&A process can be. In our experience, preparing a business for sale and engaging buyers amounts to an additional full-time job on top of maintaining smooth operations ahead of the sale.

At Axial, we connect business owners with advisors who have the relevant experience for their business sale. With over 14 years of experience in small business M&A, we’ve consistently seen advisors secure:

• 10x increased buyer coverage through their extensive professional networks (as well as the experience and insight to target the buyers who align with your exit goals).
• 25% higher sale price through accurate valuation, strategic buyer targeting, and expert negotiation skills.

After completing a brief form about your business, you’ll be paired with a dedicated Exit Consultant. They’ll learn about your business and provide a list of 3–5 curated advisors with experience selling companies like yours. Your Exit Consultant will assist you in interviewing and evaluating these advisors, helping you confidently hire the best one to manage your business sale.

Further reading: How to find the best M&A advisor to sell your business

Accepting the First Offer You Get

The first offer you get for your business is rarely the best — both in terms of the total sum and the deal structure. Jumping on an unsolicited offer can lead to a sale that doesn’t reflect your company’s actual worth.

If you’re selling due to a change in circumstances, uncertain market conditions, or a new opportunity, it can be tempting to fast-track the sale. However, patience is key, especially if your company is harder to sell (e.g., due to a lack of repeat customers or high customer concentration).

Taking a long-term approach allows you to:

• Increase the number of potential buyers who see your business (e.g., via the investment teaser your advisor shares).
• Raise the likelihood of competitive bids, which can drive up the price.

• Improve your ability to evaluate offers as you gain experience.

Simply put, giving the M&A process the time and attention it requires will increase the chances of receiving an offer that aligns with your motivations and goals for the future of your business.

More Resources for Business Owners

When it’s time to sell your business, preparation is just as important as timing.

Whether you’re focusing on succession planning, organizing your financial statements, or assembling your deal team to engage with buyers, you’ll find helpful resources in the Axial Exit Planning Center.

Further reading:

• Business exit planning: Set and meet your exit goals
• Preparing a business for sale in three steps
• How much do advisors charge to sell a business, and are they worth it?