5 Reasons to Sell Your Business Now
Too often business owners fall into the trap of waiting for the "perfect time to sell." Most often this is described as a time when the market would be willing to pay the highest price for their business. After all - who wants to sell when the economy isn't peaking, when there's a likelihood you can't get top dollar for a business? Frankly, lots of people. Selling your business isn't about perfect timing, it's much more personal than that. If you're contemplating selling your business there is a reason. Maybe it's one of these:
1. You Need A Change
If your business is no longer challenging you, you're burnt out, or you can't see yourself doing the same thing for the next ten years, you need a change. If you've lost your passion for your business, face it - it's time to move on! As an entrepreneur your second (or third) business is likely to be more successful than your first, so the sooner you sell your existing business, the sooner you get to take a break and then start working on your next. And, you are not doing your business any favor by hanging on too long!
2. You Avoid Taking Risk
When you start your business, you have nothing to lose, so you risk it all on your idea. But as you grow, you naturally become more conservative, because your business actually becomes worth something. For many of us, our company is our largest asset, so the idea of losing it on a new growth idea becomes less attractive. We become more conservative and hinder our company's growth. If this rings true to you, then you're likely a barrier to increasing the value of your business, or worse, the owner of a declining business.
3. Your Kids Don't Want Your Legacy
The dream of your children taking over the business compels many business owners to hang on far too long. Don't hope or assume a child might want to step into the family business. Have a forthright conversation to determine their interest, and put a clear transition strategy in place. Unless they are working side-by-side with you today, applying themselves like you did when you first owned your business, don't put your dreams of moving on in their hands. According to a study by the National Bureau of Economic Research, only 30 percent of businesses survive into the second generation, with only 12 percent making it to the third.
4. Better Opportunity
Hanging on to your largest assets can prevent you from taking advantage of another investment opportunity. If your business isn't giving you the investment returns you want, consider preparing it for sale and reinvesting in a different opportunity. Having at least a three year track record of increased profit is a good time to put your business on the market, however if your business isn't growing, and you're struggling with ways to grow it, cashing out and putting your money into a different investment may be wise.
5. Need The Cash
Sometimes situations come up in your life and you need some money. If your business is already designed to sell, you can go to market and realize maximum value. The less your business relies on you to get results - the more you can sell it for. The more turn-key work processes in place, the more value your business has to a buyer. If you have any question about whether your business is ready to bring you top dollar, discover the 8 Drivers of Value and find out how ready your business is to sell - get your Value Builder Score.
It can be tempting to want to time the sale of your business so that the economy and your company are peaking, but in reality, it may be better to sell sooner rather than later - so you can move forward with your life.