Benchmark Business Group

Should I Sell My Business If Interest Rates Are High?

April 17, 2023

´╗┐Deciding whether to wait for interest rates to drop before selling your business will depend on a variety of factors, including your personal circumstances, the state of the economy, and the specific characteristics of your business.

Here are a few things to consider:

  • Know the Market Value of Your Business: You simply can’t make a decision about the timing of your sale if you don’t know what your business is worth in today’s market. It’s the most important piece of information you need to plan your future. You may have an idea of what you feel your business is worth, but you don’t want to rely on what you think – get an expert opinion!
     
  • Timing: Selling a business can be a lengthy process, and it's difficult to predict when interest rates will drop. From the time you decide to sell and begin the process it can take on average between 7 and 12 months. If you're planning to sell your business in the near future, it may not be practical to wait for interest rates to change.
     
  • Market conditions: Interest rates are just one factor that can influence the market for businesses. Other factors, such as industry trends, competition, and the overall health of the economy, may have a bigger impact on the sale of your business. It's important to work with a skilled business broker who can help you navigate these market conditions and position your business for a successful sale.
     
  • Opportunity cost: Waiting for interest rates to drop may not always be the best strategy, especially if it means missing out on other opportunities. For example, if you're planning to retire or pursue a new venture, waiting for interest rates to drop could delay your plans and result in missed opportunities.

In general, it's difficult to time the market, and trying to do so can be risky. Instead of waiting for interest rates to drop, it's often better to focus on building a strong business that is attractive to potential buyers, and to work with advisors who can help you navigate the market conditions at the time of the sale.

If you’re considering selling your business in the next one to five years, NOW IS THE TIME to find out how much your business is worth today. If you want to maximize the value of your business start by discovering how your business scores in the 8 Drivers of Value, and what you can do to prepare your business to sell for maximum value. Click here to get your Value Builder Score and have a no-obligation conversation on what will increase the value of your business.

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