Plenty of businesses were sold only for their owners to find more success in another industry. Someone once sold a flourishing chicken restaurant to build his real estate empire. He’s now in the richest list of that country. And yet, many entrepreneurs fail to sell their businesses at the right time.
It’s tough to tell yourself that selling your business in one of the vibrant shopping districts of Utah or a growing restaurant scene in California is the right thing to do. You have to let go of something you worked hard for. You have to let go of something you’ve built these past years. But in business, the key is to identify the opportune time to sell your business.
So, how do you know it’s the right time to walk away from something you’ve built all your life?
Business is Growing
Business buyers will not make an offer during pre-growth, the early stages of the business lifecycle, and during post-growth when the business has reached a plateau. Post-growth means you have already made revenues and profits. What more can a business buyer expect from it? But if your business is at the ideal moment of growth, you might easily convince interested buyers to make an offer for it.
Before putting the business on the block, it’s important to determine the value of your business. Ask yourself this question: what will the buyer gain or lose from this business? Put yourself in their shoes. Would you buy this business for the asking price?
The Market is Moving Against You
You don’t always have to sell the business when it is growing. Some buyers want to take over a company when it’s time to liquidate its assets. As a businessman, you should recognize when there’s a significant trend on the horizon that will affect your business’ growth. For example, if you’re a speed-dating site, you should be worried about Tinder. If you’re in retail, you should look closely at Facebook Marketplace and Instagram. Taxi companies should consider adopting Uber into their systems.
It may be time to think of an exit strategy if you think your business will become irrelevant in the future. You should be honest with your buyers about the trends you’re seeing. Don’t let them go in blindly. Make sure they know what challenges are on the horizon before taking over your business.
It’s Not Fun Anymore
Businesses are supposed to be challenging. But if you’re already taking medications because of the stress that comes with running the business, you should consider selling it instead. No business is worth your physical and mental health. Once you find yourself anxious and depressed over day-to-day operations, then it’s time to let it go.
All it takes is to admit to yourself that you want a change in pace. Selling your business doesn’t mean failure. Rather, you are smart about your exit plans. You recognize when you can no longer lead it to profit. Or, you know that it’s simply time to move on.