Michael Shea

Central Florida's #1 Business Broker

Timing the Market: Is Now the Right Time to Exit Your Business?

by

If you ever cooked a cake you know there is a certain amount of time to bake…take it out to early and its not done in the middle…too long and you get a brick instead of something delicious to eat. Business sales are no different.

Deciding when to sell your business is rarely a matter of waiting for a “magic number” on your tax return. In the current 2026 economic landscape, the decision is increasingly driven by external forces: shifting trade policies, labor market resets, and the rapid evolution of technology.

If you are asking, “Is it the right time for my industry?” you need to look past your own P&L and peer into the three years ahead. Here are the critical questions every owner should be asking right now.

1. The Labor Question: Will Rising Wages Squeeze My Multiples?

Labor costs are often the largest variable in a business’s valuation. While wage growth has stabilized at approximately 3.4%–3.5% for 2026, the composition of those costs is changing.

  • Ask yourself: Am I over-reliant on “critical skills” roles (AI, healthcare, advanced manufacturing)?

  • The Valuation Impact: Buyers are wary of businesses where the “Key Man” risk extends to the entire staff. If your industry is facing a shortage of specialized talent, your margins might look good today, but a buyer will “discount” your value if they see a looming spike in retention costs.

2. The Margin Question: Are Tariffs a Temporary Blip or a Permanent Tax?

As of early 2026, many sectors—particularly manufacturing, retail, and transportation—are navigating a complex tariff environment.

  • Ask yourself: Can my customers absorb further price increases?

  • The Reality: Small businesses often have less “pricing power” than giants. If your margins are currently being protected by “import adjustment offsets” or temporary price hikes, a buyer will view those profits as high-risk.

  • The “Now” Factor: If you sell before a major supply chain disruption fully hits your bottom line, you are selling on historical performance. If you wait until tariffs permanently erode 5% of your margin, you are selling at a discount on a lower EBITDA.

3. The USP Question: Is Technology About to Disrupt My “Secret Sauce”?

We are entering a phase where AI is moving from “experimental” to “agentic”—meaning it can now execute complex workflows, not just draft emails.

  • Ask yourself: Does my Unique Selling Proposition (USP) rely on human-led “knowledge work” that an AI agent could do for $20 a month in two years?

  • The Opportunity: If your industry is about to be disrupted, selling now allows you to exit while your traditional model is still considered a “quality platform.”

  • The Threat: Conversely, if you aren’t using AI to streamline your operations, you may find that by 2028, your business looks like a “legacy” asset—harder to sell and worth a much lower multiple.

Why 2026 is a “Quality-First” Market

Current market signals suggest that while deal volume is disciplined, deal values for high-quality companies are at multi-year highs. Strategic buyers and private equity firms have massive “dry powder” and are aggressively pursuing businesses that have:

  1. Defensible Margins: Businesses that have already proven they can survive tariff and wage volatility.

  2. Scalable Tech: Systems that are “AI-ready” or already optimized.

  3. Low Debt Sensitivity: Operations that can handle current SBA interest rates without collapsing cash flow.

The Hard Truth: Growing your revenue by 10% over the next two years is a waste of time if industry headwinds (wages, tariffs, or tech) contract your margins by 12%.

Next Steps

The best way to answer “Is it the right time?” is to get a Preliminary M&A Valuation. This will show you exactly how a buyer views your industry risk today versus your projected growth.

Michael Shea represents the Tampa Florida Transworld office. In business since 2005, he has established a reputation as a trusted business broker across Florida’s key markets- from Tampa to Orlando, Melbourne, and more. Over the past two decades, Michael and his team have closed over $1 Billion in sold business volume and presided over more than 450 transactions. His credentials include the IBBA Certified Business Intermediary®, and most recently, the prestigious Certified Exit Planning Advisor® (CEPA) credential.