As an entrepreneur, the idea of selling your business is likely to cross your mind at some point. Building your own business out of thin air with your own blood, sweat and tears can be quite an emotional process. And the decision to sell it can be an even greater one. Who knows your business better than you do? How will you feel if the business goes downhill after you sell it? Or, what if it does far better after you sell? A lot of questions come up, and it’s not a decision to take lightly. Once you make the decision, you want to know you did it for the right reasons.
Here are some common scenarios that might present themselves and some suggestions on how to look at each one.
The Offer is too Good to Turn Down
You may not even be looking to sell when an interested investor throws an offer your way begging you to consider selling your business. Yes, it does happen! Usually this is an indicator that you’ve got a great thing going on. Now would definitely be a good time to weigh your options. If the cash offer looks too great to turn down, you may want to look into working a deal that would allow you to remain a functioning member of the business you’ve worked so hard to build.
On the other hand, you may already be looking into selling off your business. If the offer is good or at least in the ballpark, it could be time to weigh the other factors below.
Mission Accomplished
You may have gotten into your particular business with a specific goal in mind. If you’ve reached that goal, it may be time to sell off and move on to a new venture. Heck, it seems like you may just have the knack for entrepreneurship and a new endeavor may pay off as well!
Say your goal was to open five successful restaurants or build up your clientele base to a marketable level that would draw a pool of interested buyers for all of your hard work. If this is the case, there is no harm in weighing the option to sell and move on before you burn out.
Just Plain Sick of It
Alright, so you stuck around too long and you’re just plain sick of the minutia of running your business day in and day out. It may be time to put your business on the market, or there may be other options in this case.
Perhaps selling the business isn’t the only answer here. Maybe you’d be happier stepping into a different role and hiring a replacement or outsourcing certain aspects you don’t particularly enjoy. You may actually find a huge benefit in taking a step back for a bit; even a weeklong vacation can help put things back in perspective. It may be the answer to invigorating your drive to get back to your company, or it may be just the eye opener needed to see you’re ready to move on.
Your Resources May Be Better Spent Elsewhere
Times change and so must many different businesses. Even long established businesses such as a law firm must change the way they do business. Think updating technology, software, and marketing. An owner of a law firm may be completely sick of running a law firm and find that s/he enjoys or excels in developing innovative software for law firms, so it may be time to change industries. This definitely can translate to more transitive types of industries as well; say moving from a fine dining restaurant toward a more fun and stylish casual dining restaurant. It may all depend on the owners’ particular tastes and market changes. There’s no harm in change!
The Future is Dim
Starting, running and owning your own business means you likely know a lot more about your particular industry and business than most people. You may see a big, ugly roadblock down the road for your business giving you the definite advantage to either change or bail before your competition. Think about photo-developing companies like Kodak. Printed pictures are quite rare these days, but Kodak was able to foresee this nearly complete irradiation of their market share by developing digital cameras, digital photo printing stations, etc.
If you see something dangerous down the road, it may definitely be time to sell off or liquidate before it’s too late!
Selling your business is a hefty decision and should be considered very carefully. What will you do in the event you do decide to sell your company? Will you look to endeavor upon another entrepreneurial mission, head back for further education, or maybe start working for another company now that you understand the massive weight of business ownership?
Adam Toren is an Award Winning Author, Serial Entrepreneur and Investor. He Co-Founded YoungEntrepreneur.com along with his brother Matthew. Adam is co-author of the newly released book: Small Business, Big Vision: “Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right” and also co-author of Kidpreneurs.
// ENLIGN BUSINESS BROKERS RESPONDS
We find it troubling that the author implies that selling a business with knowledge that it is headed towards failure is a justification for sale. It’s immoral at best. How would you like to be duped into buying a business in that condition? Taking on more debt than you probably ever have before and putting the buyer and his family at great financial risk?
I also question the authors research quoting Kodak as a poster child of innovation. The fact is Kodak recently filed for bankruptcy with the media widely reporting that it was their lack of innovation and ability to compete in the digital space that caused their demise.
Consider the other points, but ignore “The Future is Dim”.
