We are getting interest from buyers, but I feel like we could get a higher valuation if we wait another year to build more value. How do I balance the cost of waiting against the potential upside?

Question

Tyler Smith · Accepted Answer

This is a classic strategic real option dilemma. Every month you wait to sell, you incur what economists call a flow cost. This includes the physical and emotional energy of running the business, the risk of a sudden market downturn, and the opportunity cost of what you could be doing with your capital and time. To make a logical decision rather than an emotional one, you must run a formal business valuation using both the Income Approach and the Market Approach. Calculate the precise financial gain you expect to achieve by waiting. If you believe waiting twelve months will increase your EBITDA by twenty percent, will that actually translate to a higher multiple, or will market conditions shift and compress your multiple instead? You also need to look at your team's capacity. If your leadership team is already stretched thin and hitting a ceiling, waiting might cause operational cracks that actually degrade your valuation. Use a strategic pause to objectively evaluate your market positioning. If you have the energy, a clear plan to hit specific Rocks that directly increase enterprise value, and a stable market, waiting may pay off. If you are simply holding on out of fear or perfectionism, the flow cost of waiting will quickly eat away your gains.