I have a buyer ready to purchase us now, but I feel I can get a better multiple if I spend eighteen months automating our warehouse processes. How do I mathematically evaluate the risk of waiting versus executing the sale now?

Question

Tyler Smith · Accepted Answer

An active buyer is a bird in the hand. Delaying a sale to implement an automation project is a classic strategic real option, but it comes with a high flow cost. You must mathematically weigh the projected increase in valuation against the operational wear and tear of waiting. First, calculate the actual cost of holding the business for another eighteen months. This includes your daily operational stress, the risk of a market downturn, and the conative fatigue of your leadership team. If your team is running low on energy, pushing them to execute a complex automation project while maintaining baseline profitability is a recipe for burn out. Second, understand that tech projects frequently experience delays and cost overruns. If your project takes twenty-four months instead of eighteen, or if the automation fails to produce the expected margin lift, you will have wasted valuable time. Take a strategic pause to reflect on your true motivations. If your primary goal is to exit, it is often wiser to sell now and let the buyer fund the upgrade, even if it means leaving some money on the table.