When is the right time to sell your company: the signals that say the window is open
The right time to sell your company is when four curves line up: a business growing on a credible slope and no longer dependent on you, a market paying high multiples, a tax structure prepared one to two years ahead, and you personally ready to move on. The core rule is to sell when you are not forced to, because negotiating power belongs to the owner who can say no and keep going for another two years. In practice a single point of multiple, gained or lost, moves the price by hundreds of thousands of euros, often far more than two extra years of operating growth.
Is now the right time to sell? Almost every SME and startup owner we work with asks this at some point, and almost all of them answer it with an emotion: tiredness, the fear of missing a cycle, the urge to move on. The optimal moment, though, is not emotional at all. It sits where four curves line up: your company, the market, your tax position and your own life. Selling when all four point the right way is how you bank the high price. Selling when one of them has already turned is how you leave money, sometimes a lot of it, on the table.
The trap: people almost always sell under pressure
There is a blunt rule of thumb in SME and startup sales: most deals are triggered by an event the owner did not choose, not by a prepared decision. A health problem, a divorce, a partner who wants out, a key customer who leaves, an exhausted founder who has had enough. What do these triggers have in common? They all land at the worst possible moment to negotiate. I have watched owners open talks with their back to the wall and lose twenty percent of the price in a few weeks, not because the business was worth less, but because the buyer could feel they had to sign. The buyer senses the seller’s pressure and turns it into a discount. The right moment is precisely the one where you do not have to sell. Negotiating power belongs to the person who can say no and keep going for another two years.
The best time to sell is when you do not need to. The worst is when you no longer have a choice.
Curve 1: your company is on a credible upward slope
A buyer does not buy the past. They buy a trajectory. The price peaks when the business shows recent growth, improving profitability and, above all, a credible story for the next two or three years that the buyer can execute without you. It is counterintuitive: the best moment to sell is not when you have put in the most effort, but when the remaining upside is visible and financeable. Selling at the top, just before growth plateaus, is far better than selling two years later with a curve that has flattened.
- Three years of clean, improving numbers, not a single good year that looks like an accident.
- A gross margin that is stable or rising. A buyer pays for the quality of the result, not only its size.
- Falling dependence on the owner, with a team and processes that carry the business without you.
- One or two growth levers identified and documented that the buyer can pull with their own resources.
Curve 2: the market is paying well right now
The same company is not worth the same price in every year. The multiple paid for an SME or a startup depends on things you do not control: the cost of acquisition debt, the appetite of buyers and funds, the consolidation under way in your sector. When money is expensive, buyers finance less, and multiples compress. When a consolidator is buying your competitors one by one, the window is open, and it closes once the sector is consolidated. Watching these signals is well worth the effort, because they move the price by double digit percentages without you changing anything inside the business.
A worked example that makes the trade off concrete
Take a company with a normalized EBITDA of 800,000 euros this year, expected to reach 1,000,000 euros in two years. Today the market pays a multiple of 6, so a value of 4,800,000 euros. If you wait two years and the growth materializes, but rates rise and the multiple falls to 5, you are worth 5,000,000 euros. You worked two more years, carried two more years of risk, for 200,000 euros more. If instead the multiple holds at 6, you are worth 6,000,000 euros, and waiting was the right call. The point is not that you should always sell early. It is that you should put numbers on both scenarios instead of feeling your way through them.
Waiting is never free. Every extra year is a year of market risk, operational risk and personal risk that you carry alone.
Curve 3: the tax and the structure are ready
Net proceeds matter more than the headline price, and the gap between the two is decided years before the sale, not at signing. In France, the capital gains regime that applies, the reliefs tied to how long you have held the shares, contribution and reinvestment schemes, retirement allowances for the founder, the choice between a share sale and a sale of the business assets: all of this can be a major part of the final proceeds. Some of these optimizations require an upfront reorganization and holding periods. Wanting to sell in six months when the structure is not ready often means giving up a tax saving that one year of planning would have secured.
- Check the capital gains regime that applies to your situation and the holding conditions you need to meet before selling.
- Decide early between a share sale and a sale of business assets, which carry very different tax consequences.
- Pay out surplus cash and remove non operating assets that are not meant to be part of the deal.
- Talk to a tax adviser before any letter of intent. Once it is signed, most of the levers are locked.
Curve 4: you are ready to move on
This is the most neglected curve and the most decisive one. A sale almost always comes with a handover period, sometimes an earn out tied to future results over two or three years. If you sell without knowing what you will do next, you risk unconsciously sabotaging the transition, or finding yourself, check in hand, with a void that money does not fill. The owner who has a clear plan for the next chapter negotiates better, lets go of control more calmly, and gets through the transition without friction. The question is not only how much. It is what you are moving toward.
How to make the four curves converge
The right moment is rarely perfect on all four dimensions at once, but at a minimum the business has to be in good shape and you must not be forced. The other two curves, the market and your tax position, can and should be worked on ahead of time. That is why a sale is prepared twelve to twenty four months in advance, never in a rush. Our guide on preparing the sale over twelve months walks through each of these workstreams, from owner dependence to tax.
Before any of that, the most useful thing is to measure objectively where you stand today on these four fronts. Our exit readiness scorecard gives you an honest read on your position and tells you whether the window is open now, or what is left to align before it is.
Key points
- Most SME and startup sales are forced by an event (health, divorce, burnout), and a pressured seller takes a discount.
- The best moment to sell is the one where you can say no: leverage comes from not having to sell.
- Price depends as much on the market multiple, which you do not control, as on the company’s performance.
- Net proceeds are decided one to two years before signing, through the tax structure, not at the negotiating table.
- Put numbers on both scenarios, sell now versus wait, instead of feeling your way: waiting is never free.
Frequently asked questions
Is it better to sell while still growing, or to wait until I have hit the peak?
A buyer pays for a trajectory, not a peak already behind you. Selling while the growth is still visible and credible almost always earns a better multiple than selling after the plateau, when the curve flattens and the buyer starts doubting the upside. The rule of thumb: leave a notch before the top, not a notch after it.
How long does it take to prepare a sale properly?
Plan for twelve to twenty four months. That is the time it takes to reduce owner dependence, produce three clean years of accounts, get the tax structure ready and let the holding periods some regimes require run their course. A deal decided and closed in three months almost always costs you a discount or a tax bill a little planning would have spared.
How do I know what my company is actually worth today?
Value roughly equals a normalized EBITDA times a market multiple specific to your sector and size. The key word is normalized: you have to adjust for your own pay, one off costs and non operating items before applying any multiple. A serious valuation beats a number overheard at dinner, which is often overstated by a factor of two.
I am mostly just tired. Is that a good reason to sell?
Fatigue is a signal worth hearing, but a poor scheduler. Sell while exhausted and you negotiate badly, and the buyer feels it. It is often better to delegate, step back for six months to rebuild some slack, then decide with a cool head whether the window is genuinely open. A rested owner who can still say no gets a far better price than one at the end of the rope.
Is your business ready to sell?
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