Buying a business
Should a Downturn Change Your Plan to Sell Your Business?
When an economic shock should change an exit plan and when it should not, how buyers judge a hit year, and what to ask first.
By Michael D. Rubin, CEO & Founder · Updated September 2026 · 715 words
A downturn should change your plan to sell only if it has changed your company's results or your personal situation for more than a short period; if the business is recovering and you are prepared, a weak economy is rarely a reason to abandon a sound exit plan. When the pandemic hit in 2020, many owners assumed they had missed their moment, yet most kept their plans and new buyers kept arriving. The lasting lesson is about preparation, not prediction.
Three choices, and when each makes sense
| Choice | Makes sense when | Watch out for |
|---|---|---|
| Keep the plan | Results have held up or are recovering, and your reasons for selling have not changed | Buyers asking more questions about the weak period, so have answers ready |
| Delay | Earnings fell and are recovering, and you have the energy and team to rebuild a record | Waiting has costs too: age, health and fatigue do not pause |
| Accelerate | You expect a longer decline in your sector, or personal reasons make waiting risky | Selling in a hurry, with thin preparation, into a cautious market |
How buyers look at a company after a shock
Buyers do not simply mark every price down in a downturn. They look at how your company behaved. A business that kept its customers, protected its margins and adjusted quickly shows resilience, and resilience is worth paying for. A business whose earnings fell sharply will be valued on a mix of its earlier record and its recovery, often with part of the price tied to future results through an earnout, a payment made later only if agreed targets are met.
The owner who can explain what happened, what was done about it and what the latest months show is in a far stronger position than one who hopes the buyer will overlook it.
Owners without a team cannot wait out a cycle
The owners hit hardest by a sudden downturn are often those who planned to retire soon but never built a management team. They cannot step back while the business recovers, because the business is them, and they cannot sell at a good price, because buyers see both the weak year and the dependence on the owner.
The fix is the same in any economy: build a second layer of management, keep clean books and widen the customer base years before you need to sell. Then a bad cycle becomes a question of timing, not a crisis. Our answer on increasing value in the next year lists what can still be done in a short window.
Downturns also create buyers
Economic shocks push some people out of corporate careers and toward owning a business, and they make established, profitable companies look attractive compared with starting something new. Private equity groups and strategic buyers with capital to put to work keep buying through cycles as well, often looking for well-run companies at a moment when fewer are offered.
At the same time, many owners of retirement age are looking toward an exit, so the number of companies for sale tends to grow. That lets buyers pick the best-prepared ones. The owner's job, in any market, is to be one of them.
Questions to ask before changing course
Before changing a sound exit plan, work through these with your advisor. Our answer on how to know when to sell covers the personal side of the decision.
- Has the downturn changed my company's results for more than a quarter or two?
- Are the most recent months recovering, flat or still falling?
- Has anything changed in why I want to sell, or when I need the proceeds?
- Do I have a team that could run the company while I wait?
- What are buyers actually offering for companies like mine right now?
How MDR & Associates helps owners decide
MDR & Associates starts with a free, confidential discovery meeting and an opinion of value after reviewing three years of financials, which gives an owner a real number instead of a guess about the market. Where more time would raise the price, pre-exit consulting covers the 12 to 24 months before a sale. Where the company is ready, the firm takes it first to its own database of qualified buyers and negotiates multiple offers at once. To start, request a free valuation snapshot.
Where this fitsBuy a business in Texas →
Questions owners ask next
Will buyers ignore a bad year if the rest of my record is strong?
They will not ignore it, but they will weigh it. A clear, documented explanation and a strong recovery in the most recent months matter most. Expect buyers to ask for monthly figures through the period, and possibly to tie part of the price to future results if the recovery is recent.
Is it better to sell before a recession starts?
Nobody can reliably time one, and trying often leads owners to wait too long. A better test is whether your company and your personal plans are ready. A prepared company sells in most conditions; an unprepared one struggles to draw good offers even in a strong market.