Is It Time to Sell?
As an advisor to digital agencies and SaaS businesses, one of the most common questions I hear from founders is: “When is the right time to sell my business?”
It’s a deceptively simple question with a deeply complex answer. Selling a business isn’t just about financial metrics or market conditions—it’s about aligning your personal goals, operational readiness, and market positioning to create the best possible outcome for you, your team, and your clients. And in just a few days since the US tariff announcements, economic uncertainties have reached crisis levels, compounding the difficulty in making a decision like this - or even knowing how to assess the various options. Coupled with the need to operate in a market re-shaped by AI, having the ability to assess your business for transaction readiness, and a decision-making framework to guide you through the various strategic alternatives, is crucial.
To help you navigate this critical decision, I’ve broken down the key questions every founder should ask themselves when considering a sale.
1. The Financial Readiness Checklist
Before putting your business on the market, you need to assess whether it’s financially attractive to buyers. Ask yourself:
Are you large enough or profitable enough? Buyers look for businesses with a proven track record of revenue growth and profitability.
Are multiples favorable right now? Valuation multiples can fluctuate based on market trends. For example:
During the pandemic, digital agencies with eCommerce expertise saw multiples as high as 10x EBITDA, while SaaS businesses often commanded 10x to 20x ARR.
In 2023, valuations normalized slightly, with digital agencies typically ranging from 5x to 8x EBITDA and SaaS businesses from 5x to 12x ARR.
How do interest rates, inflation, and global economic factors impact your valuation? Rising interest rates and economic uncertainty have made buyers more cautious, but businesses with strong niche expertise, in resilient cateogies and with recurring revenue streams continue to attract premium valuations.
2. The Operational Readiness Checklist
Buyers want to know that your business can scale without requiring significant additional investment. Consider:
Do you have the right leadership team in place? A strong, independent leadership team signals that your business can thrive without you.
Are your processes and infrastructure mature enough? Scalable systems and documented processes reduce risk for buyers.
3. The Client Portfolio Checklist
Your client base is a critical factor in your business’s valuation. Ask yourself:
Is your client portfolio well-balanced? Over-reliance on a single client or a small group of clients can be a red flag for buyers.
Are your clients in growing industries? Buyers are more likely to pay a premium for businesses serving high-growth sectors.
Are your clients active advocates - not just satisfied customers?
Do you have a repeatable process for strategic client development, and a strong client services team to implement this?
What risks exist in your client contracts - termination for convenience clauses, overly long payment periods, and unfavourable warranty clauses?
4. The Market Positioning Checklist
Your brand and niche play a significant role in attracting buyers. Consider:
Have you established sufficient brand awareness and authority? A strong reputation in your niche can command a higher valuation.
Do you have a unique specialization? Buyers are drawn to businesses with a clear competitive advantage.
5. The Strategic Growth Checklist
Sometimes, a little extra effort before selling can significantly increase your valuation. Ask yourself:
Should you expand into new markets or services? Diversifying your offerings can make your business more attractive, however requires investment and potentially a long-term commitment.
Do you face competitive threats entering into your market, and can you build a defensive moat against these organically, or do you require investment?
Would merging with a complementary business increase your valuation? Strategic partnerships can create synergies that appeal to buyers, but can distract from operations and add complexity to your business.
6. The Founder Mindset Checklist
Selling a business is as much an emotional decision as it is a financial one. Reflect on:
Are you prepared to let go of control? For many founders, this is the hardest part of the process.
What are your personal and financial goals? A sale should align with your long-term vision for yourself and your team.
How will you incentivize and reward your team? A stable, motivated team is critical to a successful transition.
Conclusion
Deciding when to sell your digital agency or SaaS business is one of the most important decisions you’ll make as a founder, and requires a careful balance of financial, operational, and emotional considerations.
Get in touch to set up a time to learn more about my Transaction Readiness Audit and Decision-Making Framework:
vanessa@alandoconsulting.com
US 1 914 506 0576
UK 44 78 3112 5299