Just like life, running a business has its ups and downs. Interests change, motivations change, and situations change. Perhaps you’re a serial entrepreneur and just like owning a business.
Maybe you buy and sell businesses to increase your cash flow.
But how do you know when it’s time to sell your business?
In this article, we’ll discuss six telltale signs that you should sell your business.
6 Signs You Should Sell Your Business
Business owners don’t exist in a vacuum. There are all kinds of elements and factors that come into play when knowing when to sell a business. Here are 6:
Shifting Market Trends
The market changes daily. Consumer demands come and go. Consider MySpace. For a few years, it was the top social networking platform.
But with the advent of Facebook, Myspace quickly lost popularity and value.
Fortunately, MySpace’s owner, Tom Anderson sold the company while it was at its peak. If at all possible, you’ll want to do the same.
Tom saw a changing market and sold the company for a smooth $580 million and is now reaping the benefits of his foresight.
A higher valuation allows for a higher sales price and higher earnings for the seller. Play your cards right, and you could be set for life.
An Offer You Can’t Refuse
Perhaps market conditions are steady, and your product is still in high demand. As your customer base grows, so will the number of potential buyers who want to cash in on your success.
When you created your business, you were in it for the long term.
But, along comes someone and makes you an offer you can’t refuse.
It would do you well to consider taking them up on that offer.
Kevin Systrom and Mike Krieger may not be household names, but on October 6, 2010, they launched a little app called Instagram. When Facebook made them an offer of 1 Billion in 2012, it’s safe to say they got their offer they couldn’t refuse.
Contrary to popular belief or Shark Tank on TV, owning a business isn’t always a walk in the park.
Business owners suffer from burnout, just like regular employees.
The most common personal issue from owning a business is stress.
Those 60-80 hour work weeks and stress from trying to meet deadlines (and payroll) can take a toll on a business owner – quickly.
This stress can zap your motivation and ruin everything from meetings at work to relationships at home.
That’s why it is critical and honest when you see yourself losing motivation. If you can’t rebound and get it back, it may be best to sell your business and begin your next chapter.
Your Creativity Disappears
No matter what type of small business you own, your interests and perspectives will change. Your skill set should as well.
We see it all the time. An entrepreneur hits the ground running but hits a plateau. They can’t seem to get their creative juices flowing.
If you hit this plateau and are unable to (or don’t want to) tweak your business model to get your “groove” back, it may be time to get a business valuation, find prospective buyers, and sell.
You’re Out of Money
Let’s face it. 65% of businesses fail within the first ten years. Failure is a normal part of life.
While we feel that it’s essential to give your business your 100%, it’s also important to be mindful of your money. Don’t take out debt to continue to run your business.
If you have to cut into your life savings or your retirement fund to keep your business afloat, it may be an excellent time to consider selling.
If your tax returns or financial statements look horrible, it may be an excellent time to consider selling.
Perhaps you’re not quite ready to sell. Consider investing in a business consultant.
You can’t run a business without money to invest in its growth.
It’s Time to Retire
Perhaps you’ve survived the market, declined lucrative offers, kept your sanity, remained creative, stayed afloat financially, and just want to retire, buy some real estate on a beach somewhere, and take it easy.
If that sounds like you, you should start devising your exit strategy right now.
Create an exit plan to make the sale of your business and the process of transforming ownership smooth and stress-free.
Without a clear business plan, you’re sure to leave money on the table and have a complicated sales process.
Only You Can Decide To Sell Your Business
Selling your business is a difficult decision that only you can make. Hopefully, these six signs that you should sell your business can help you see when it’s time to at least start considering a move.
Should you be considering selling your business, feel free to contact us to learn how we can help you.