The Business Was Worth More Three Years Ago
By Troy Frank, Owner, Indiana Equity Brokers Estimated read time: 6 min
The short answer: The best time to sell a business is while it’s still growing, not after momentum fades. Owners who wait until a health scare or burnout forces the sale usually accept a lower price, because buyers discount stagnant, owner-dependent companies. A business that might earn 4 to 5 times EBITDA while growing can reprice closer to 3 times once revenue flattens. The smart move is to start planning two to four years before you think you’ll sell, so you still have time to improve value before going to market.
We have a version of the same conversation almost every month. An owner is finally ready to sell, and the business they bring to market is no longer the business buyers would have paid a premium for three years earlier. The company has been good to them, and they’ve built something real. But when we open the financials, the picture is softer than it used to be. Revenue has plateaued, a couple of key people have left, and reinvestment slowed down because they didn’t want to spend money on something they were about to hand off.
The business is still sellable. It would simply have been worth more, often a lot more, when it still had momentum. And by the time most owners feel that shift, the window to fix it has usually closed. This is one of the most expensive mistakes I see Indiana owners make, so let’s walk through why it happens and how to avoid it.
Most exits aren’t planned, they’re triggered
Owners like to believe they’ll pick the perfect moment to sell. In practice, most sales get set in motion by something that was never part of the plan. A health scare, a falling-out between partners, a lost key customer, a spouse who’s done waiting, or a surprise offer all force the timeline.
Retirement creates its own version of the trap. The business has thrown off strong income for years, so the owner keeps running it while their engagement quietly fades. They stop chasing new opportunities, skip the trade shows, delay a hire, and let the strategic plan sit in a drawer. None of that shows up on a tax return right away. It shows up in momentum, and sophisticated buyers and their lenders are very good at telling the difference between a business that’s still growing and one that’s being held together.
The numbers behind this are hard to ignore. Roughly half of US small-business owners are now 55 or older, yet fewer than a third have a formal succession or exit plan. About 41 percent of US businesses are boomer-owned, and an estimated $10 trillion in business value is expected to change hands by 2030 as those owners retire. A lot of those companies will hit the market at the same time, and the ones that planned ahead will stand out.
What waiting actually costs you
The decline rarely arrives in one bad year. It happens in layers. A sales hire gets delayed, a systems upgrade gets deferred, and a competitor starts winning work you’re no longer fighting for. Key employees feel the drift and start taking recruiter calls.
The biggest missed investment usually isn’t equipment or marketing. It’s management depth. Owners who wait too long often find they’re still holding too many of the important customer, supplier, and employee relationships themselves. That owner dependence is a risk a buyer can see, and they price it in.
By the time your trailing twelve-month numbers show the damage, buyers may already be trimming your multiple. In some sectors a business that could have drawn 4 to 5 times EBITDA during steady growth gets re-priced closer to 3 times once revenue stalls, customer concentration tightens, or the owner looks checked out. On a $5 million business, that gap is not a rounding error. It can be the difference between a clean exit and a stressful one.
There’s a quieter cost too. A declining trajectory shrinks your buyer pool. Private-equity buyers and other institutional acquirers generally aren’t hunting for turnaround projects in the lower-middle market. Fading momentum tends to leave you negotiating with a smaller group of buyers, which is exactly the wrong spot to be in when you’ve finally decided to sell.
Selling from strength isn’t the same as selling in a hurry
The advice I give owners is not “sell now.” It’s “start thinking seriously about this before you assume you have to.” Those are very different things.
A business that sells from strength commands a premium. Growing revenue, high customer retention, clean books, and a management team that doesn’t depend entirely on the owner all attract more buyers. More buyers create competitive tension, and that tension is what pushes price up and gets deals closed faster with fewer conditions. The owner holds the upper hand precisely because they don’t need to sell. They’re choosing to.
That advantage fades the moment the business shows cracks. Buyers can sense when an owner is tired, when reinvestment has slowed, and when the next chapter is overdue. Desperation is expensive, and buyers are happy to let you pay for it.
What early planning actually looks like
For most owners, “early” means two to four years before a likely sale. Not because the sale itself takes that long, though good preparation does take time, but because that’s the window when the decisions that shape value are still in front of you. Start a year or two out and you can still move the needle. Wait until the year you list and most of those levers are gone.
Early planning gives you a clear read on a handful of things that decide your price:
- What your business is actually worth in today’s market, not what you hope it’s worth
- Which value drivers matter most to the buyers likely to acquire a company like yours
- Where your financials, ownership structure, or operations might raise flags in due diligence
- How dependent the business still is on you personally
- Which investments could still lift value before you go to market
- How different deal structures would affect your taxes, risk, and net proceeds
None of this commits you to selling. It simply gives you a clearer picture of your options and enough runway to act on them deliberately instead of reactively. This is the heart of good exit planning, and it’s where owners who plan ahead consistently pull away from the ones who don’t.
Frequently Asked Questions
When is the best time to sell my business? The best time to sell is while the business is still growing, with steady revenue, clean books, and a team that can run without you. Selling from strength attracts more buyers and earns a higher multiple. Owners who wait until burnout, a health issue, or a lost customer forces the sale almost always accept a lower price.
How long before selling should I start planning? For most owners, two to four years before a likely sale. The sale itself doesn’t take that long, but the decisions that build value, such as diversifying customers and building a management team, take time to pay off. Starting early is the single most reliable way to sell for more.
Does waiting too long to sell lower the value of my business? Yes. As revenue flattens and the owner disengages, buyers discount the multiple to account for the added risk. A business that might have earned 4 to 5 times EBITDA while growing can reprice closer to 3 times once momentum fades. A declining trajectory also shrinks your buyer pool, which weakens your negotiating position.
Why do most business owners end up selling at the wrong time? Because most exits are triggered, not planned. A health scare, a partnership split, a lost key customer, or simple burnout sets the timeline instead of the owner. By the time those pressures appear, the business has often already lost the momentum that would have earned a premium.
Do I have to be ready to sell to talk to a broker? No. A good first conversation is about understanding where you stand, what your business might be worth, and what buyers would care about. It doesn’t commit you to anything. Knowing your numbers early is what gives you real options later.
The bottom line
The owners who get the most for their businesses are rarely the ones in a hurry. They’re the ones who looked at their options early, while the business still had momentum and while there was still time to fix what buyers care about. Waiting until circumstances decide for you is how good businesses sell for less than they should.
If selling is even a two-to-four-year question for you, now is the right time to understand what your business may be worth and what you can still improve before going to market. A confidential conversation costs nothing and commits you to nothing. Troy Frank and the team at Indiana Equity Brokers have closed more than 878 deals for Indiana business owners, with no upfront fees and a free valuation to start. You can reach Troy at troy@indianaequitybrokers.com
