So for example, if you have a Software as a Service (SaaS) company, you should consider the broad technology trends. Where does the company fit in the industry, and who are the other players in that space? You can begin to get a sense of if the timing is right and if the dynamics within that industry will value or appreciate what your company has to offer strategically as well as the core economics of the business.
Particularly if you think about the lower middle market, we tend to deal with this issue of the company has made investments that haven’t materialized or have been realized in the P&L. The business owners are always wanting to get paid for value that’s inherent in the business but isn’t showing up yet in the company's cash flow. One of the best ways determine the right time to sell is to really articulate and understand that strategic component of the business and how it plays into a market trend in a positive way. When this is mapped out, you will be able to determine if you’re on the growth curve that buyer like to see; you’re not too early in it but you’re not at the very peak either. When you wait until you get to the peak, it may be too late to sell for maximum value.