It’s very common for business owners and entrepreneurs to question whether the business has run its course and it’s time to sell.
If it doesn’t seem obvious that time has come, contemplating the “why” is a healthy and pivotal exercise to take on before taking the next step.
Beyond financial reasons or reaching retirement age, there are some very valid reasons that often signal to business owners that the time has come to sell.
Here are five sound reasons that should help solidify the decision to sell, as well as some resources and actions to take once that decision is made.
Reason 1: Burnout
Business ownership is no joke. The weight of the burden can be so heavy, some choose to step away momentarily, take a vacation, hire more support staff, or even put more effort in to prevent more burnout.
If these actions have been taken, but there is still persistent burnout, the best thing to do is prepare to sell before a lack of interest or motivation affects the business.
Reason 2: Business Momentum
Speaking of burnout, what if the opposite is happening? What if everything is going extremely well and the business is humming along with little stress or input?
Business owners may find themselves in an attractive selling situation full of momentum with such signals as:
- Profits booming
- Staff outperforming expectations
- New clients and opportunities piling up
- Growing business
Counterintuitive as it may seem, when a business is doing well is often an ideal time to sell.
First of all, an ambitious staff with growing potential may feel underutilized if owners don’t opt out at the right time. Second, selling while things are going well is more lucrative.
Selling a business in its prime can allow a new owner to move the business forward, avoid any burnout, and allow the original owner to be rewarded without the risk of losing value in the business.
Reason 3: Distracted by Other Business Opportunities
Wandering eyes are a big tell that it’s time to sell. Other opportunities may seem ideal, but it’s rarely beneficial to divide attention too much.
Starting a side hustle, no matter how attractive, raises questions about the main business among prospective buyers. Making a clean break before heading down another path will be the better route.
Although other options exist when attracted to other opportunities, such as collaborating with a partner or merging businesses, the truth is that you just may not be motivated the same and it’s time to move on.
Reason 4: Selling Was the Plan All Along
Some business owners are serial entrepreneurs, moving from one business to the next when another great idea comes along.
That is, the plan was always to keep selling. These business owners are lucrative with generating ideas, starting a venture, and selling to an owner that thrives taking the business into the next phase.
Reason 5: The Ship is Sinking
Through no fault of the business owner, some industries may be doomed to fail in the future.
The product may be losing appeal, digital advances may make a business obsolete eventually, or a service may eventually not be needed.
There are many reasons a prognosis may not be good, so first analyze what is futureproof and what will be irrelevant to make a shrinking business attractive to buyers.
Be imaginative, rework ideas, pivot. Then sell.
Ready to Sell Your Business? Now What?
There are all kinds of well-founded reasons to sell, such as retirement, financial reasons, and even the market- or personality-driven reasons listed here. Whatever the reasons are, business owners who have questioned the why may now be asking, “How?”
The process of selling your business can be daunting, but if you take the right approach, your profits can pay for your next venture or give you the financial freedom you seek.
The next steps to consider include:
- Calculating the Business Value
- Organizing Financials
- Finding a Qualified Broker
- Figuring Out Your Future Role (if any)
A broker is a particularly valuable asset in the later stages of a sale, which include negotiations, due diligence and finalizing the deal.
The experience and counsel top-notch brokers bring to a deal is indispensable. The also provide services that a business owner who is selling would have a hard time managing without help, including:
- Finding the best buyers
- Confidentiality
- Marketing the sale
- Providing confidentiality
- Getting the deal financed
Michigan Business Broker Nadir Jiddou is Here to Help
Having bought and sold businesses for more than 18 years in Michigan, Nadir Jiddou utilizes his contacts and experience to help his clients achieve their objectives quickly.
Call us at (248) 220-3274 or look at the business listings we currently have on hand to see what might be a fit for you.