In the startup phases, many small business owners find it hard to imagine ever selling or letting go of their new venture. If you find yourself exhausted after many years of running your business, you are not alone. The most common reasons for selling are burnout, lessened enjoyment, and declining revenue. Even the most successful business owners eventually sell their businesses when seeking new opportunities or lifestyle changes. Regardless of the reason, deciding to let go of your business is a difficult one. In order to protect your investment and the employees who count on your every day, it is important to recognize when it is time to sell and when to stay. The following will outline some signs you should consider selling your business.
You are Experiencing Burnout
This is the most common reason that most owners choose to sell. Often times, a thriving business will be sold because the owner is suffering from exhaustion. Many independent owners will weigh the benefits vs. the risk of health dangers as a result of continued stress. Signs of burnout include: feeling overwhelmed, a loss of perspective, and an inability to prioritize on a daily basis. If you are experiencing burnout, you will not be productive to your business or your customers, and it may be time to get out.
All companies fluctuate financially depending on the time of year, but sometimes the level and rate of debt is unsalvageable. Keep a close eye on cash flow statements to determine any debt you are incurring. If your liabilities are 200 percent of total assets, it is time to sell or liquidate to avoid bankruptcy. This is perhaps the most difficult reason to sell your business, but it is important to sell before it gets worse.
Many times an owner will do everything necessary to ensure the success of their business, but it still declines as a result of industry conditions. There are a variety of conditions that can trigger industry changes including consumer demand and mega trends. As a business owner, it is imperative to keep a close eye on competitors and market trends. Megatrends are always looming on the horizon, if you do not stay competitive your business will become irrelevant.
The Business Has Outgrown your Skills
As your business grows and begins to turn a profit, many entrepreneurs find that they are no longer an asset to the company. Once a company reaches a certain profit margin, and more employees are necessary, the need for owners on-site can become obsolete. While the profit increase is great, many Entrepreneurs see this as a sign to sell the business and move on.
It Is Time for a Change
If you have been in the same business for a while, you may find yourself looking for new and different opportunities. In cases of retirement, you may want to plan an exit strategy for your existing business and seek a lucrative new franchising opportunity. This is a perfect solution for entrepreneurs who have recently placed their company on the market, such as a carpet cleaning business for sale. With the newfound freedom of running a business from the ground up, you can partner with companies and stay in your industry. This will award you the change you are looking for with less hassle.
If your business falls under any of these categories, or you feel you have taken your business as far as it will go, get out while you are ahead. Knowing when to sell your business is important, but it is also a personal decision that you should not take lightly. If you decide to move forward with the sale, make sure you understand your businesses value and create a financial plan. Preparing for the business exit and doing your due diligence will ensure that the sale goes smoothly.