In business ownership, one strategic question remains at the core of every exit plan: Do you hold and grow your company, or sell and move on?
This decision—more critical now than ever amid global economic uncertainty and evolving trade policies—can define the legacy and financial outcome for owners. With tariffs, interest rates, and market volatility influencing valuations, timing truly is everything.
Our Principal Bob Latham wisely observes, “Owners rarely sell too early, but far too often, they hold on too long.” And the consequences can be stark. Health issues, market disruptions, or unexpected regulatory shifts can rapidly erode the value of a business built over decades.
One vivid example from recent experience: a business owner in his late 60s had planned to grow his company for another decade but was suddenly struck by illness. The business lost its guiding force, and its value to heirs declined sharply. This underscores a sobering reality—no matter how strong your company seems, unforeseen events can derail even the best-laid plans.
How can owners protect their wealth and legacy? Two key practices stand out: a personal health check and a thorough scan of the business horizon.
Personal Health Check
Just as personal health is vital for individuals, regularly assessing the health of your business is crucial for long-term success. Monitoring key indicators like cash flow, customer retention, operational efficiency, and market position helps you spot risks early and seize growth opportunities before they become urgent. Proactively evaluating your business’s “wellness” ensures you’re prepared to make strategic decisions—whether that means scaling up, pivoting, or preparing for a sale.
Scanning the Horizon
Even a thriving business isn’t immune to external forces. Interest rate hikes, inflationary pressures, changing tax laws, or shifts in buyer appetite can swing valuations dramatically.
Right now, for example, rising interest rates and inflation are headwinds for some sectors, while strong buyer competition in others sustains high valuations. Owners who actively monitor these market dynamics can anticipate windows of opportunity—or risks—to act decisively rather than react too late.
What Moves Business Values?
Factors that boost business value:
- Consistent profit growth
- Recurring revenue and diversified customer base
- Strong, stable management teams
- Favorable tax environments
- Robust economic confidence
- Healthy owner focus and energy
- High buyer demand and capital availability
Factors that can diminish value:
- Declining or volatile sales/profits
- Market downturns or competitive disruption
- Owner health issues or leadership instability
- Rising interest rates and taxes
- Shrinking pools of qualified buyers
- Legal or regulatory challenges
The Good News for Sellers Today
Despite uncertainty, current market conditions still favor sellers. Acquisition capital is plentiful, and motivated buyers are competing for quality companies. But this window won’t remain open indefinitely. Baby Boomer retirements and economic shifts will soon swell supply and likely shift power toward buyers.
Final Thoughts
Smart owners recognize the urgency of timing. They do the hard work early—monitoring their health, scanning market trends, and partnering with seasoned M&A advisors who understand their business and can navigate complexities.
At Eaton Square, we guide owners through these critical decisions with insights grounded in over a thousand successful, well-timed transactions worldwide. Whether you’re holding and growing or preparing to sell and move on, understanding timing and market dynamics is your best tool for maximizing value and securing your legacy.
Thinking about your next move? Reach out to Eaton Square today to start your personalized business readiness review.
