
You have poured your heart and soul into building your business. You are proud of what you have accomplished, but lately, you have been feeling less and less excited about it. Your business is not where you want it to be, and you feel like the time has come for someone else to take over.
There are many reasons why you may want to sell your company. You may want more time with family or friends, or another business opportunity has come up. Perhaps, you just need a change in life. Regardless, it is important to figure out the right time to sell your business.
In this article, we discuss how to determine the right time to sell your business and highlight some factors you may want to consider when deciding to sell.
Reasons why business owners consider selling
1. Retirement
After years of working hard and growing a company, many business owners are ready for a change. Selling their business allows them to retire early, pursue other interests, or simply enjoy the fruits of their efforts.
2. Major Life Event
Life happens! Maybe you got married or had kids. Perhaps you needed a break for health reasons or suffered a personal loss—whatever situation led to this decision, selling your business can provide financial relief by paying off medical bills and taking care of dependents in times of crisis. For example, Jim Remsik, the founder of Adorable, decided to sell the company after he had a health scare. You can learn more about his story and the process he followed here.
3. Increased Competition
It’s not uncommon for businesses in a particular field to see new competitors pop up as time goes on, and it can be challenging at times to compete with other businesses in your field for a variety of reasons. Selling provides an opportunity to get out while you’re still ahead of the game and enjoy some peace of mind!
4. Lack of Time or Interest
When you’re running a business, it can be easy to feel like your plate is always full. Perhaps the problem isn’t that you’re too busy. It could be that you’ve lost enthusiasm for what you’re doing.
If that sounds like you, selling your business might be an option worth exploring. You’ll be able to make a clean break from something that doesn’t inspire you anymore while getting paid for all the time and energy (and money) you’ve put into it until now. An example of a business that was sold due to its founder wanting to pursue other, more interesting projects is Storemapper. The founder, Tyler Tringas, wrote about his decision to sell on his blog, naming “the prospect of really building momentum for projects that I wanted to invest more time and energy into,” as the primary reason for selling his business. You can learn even more about his process on the podcast interview Tyler Tringas did for “Built To Sell”.
When it’s time to sell your business, it’s important to know there is no shame in choosing a different path than the one you’ve been on for years or even decades. Let’s take a look at some factors you should consider when deciding to sell.
Factors to consider when deciding to sell
When deciding whether or not to sell your business, there are many factors you should consider. Here are some of the most important ones to get you started:
1. Market conditions - This includes the current state of the economy and how it affects your industry, as well as the competition in your industry. For example, if the market is in a recession, it may not be a good time to sell a company because buyers may be hesitant to invest. On the other hand, a strong economy with plenty of capital available could create an opportunity for a profitable sale.
2. Financial position - This includes the amount of debt you have, how much cash you have in hand, and if the amount of money you might receive from selling the business will allow you to move forward in a strong financial position. If the company is not in a robust financial position, it may be difficult to find a buyer or receive a satisfactory offer. When a company is heavily indebted or has been losing money, there is little incentive for a potential buyer to invest.
3. Personal goals - These might include wanting more time with family or needing a break from work so you can focus on other things in life. When you are looking to retire, you may have a different timeline and set of priorities than if you were planning to reinvest in another venture. You should consider your own personal goals when deciding whether to sell the company and whether the sale is likely to help you achieve your desired outcome.
4. Professional goals - What do you want out of life? Do those goals align with what’s happening at your company right now? For example, if you want to ensure your employees are taken care of and are provided with a good transition, you should prioritize finding a buyer who is willing to honor that commitment. If you prefer to have a quick sale and move on, you may prioritize a buyer who can move quickly and close the deal as fast as possible. If you want to ensure that the legacy of your business is preserved, you should find a buyer who has a similar business philosophy and is willing to invest in your vision.
There are many factors to consider when making the decision to sell your business, but we hope we’ve provided you with some helpful information that can guide you in the right direction.
Whether you’re looking to maximize the value of your business or to transition into something else, we can provide the tools and expertise to make it happen. Get in touch today.
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