Owning a business is rewarding but also incredibly taxing. And the longer you own a business, the more you might find yourself asking: “Should I sell it?”
5 Reasons to Consider Selling Your Business
Whether you started your business with the ultimate goal of selling within a few years, or you sort of stumbled into starting a company and have always assumed that you’d continue running it indefinitely, nobody owns a business forever. There eventually comes a time when selling is the right move. But how do you know when it’s time?
While the specifics of every situation will vary, here are a few overarching factors to indicate selling your business (sooner rather than later) is the right move:
1. You No Longer Have the Passion
Passion alone isn’t enough to make a business successful. However, it’s certainly a necessary ingredient. And if you no longer have the same passion for your business as you had in the past, this is a sign that you’re trending in the wrong direction.
This is something entrepreneur Kate Harrison knows firsthand. When she started her business, she had an insatiable desire to solve problems and satisfy customers. This fueled her for many exhausting years. She was excited to get out of bed every morning…until she wasn’t.
“Then one day recently I woke up and realized I was just tired. I was burnt out and even a week long vacation without my computer did not revive me,” Harrison recalls. “My scale had finally tipped from passion to exhaustion. If you are tired and cannot revive yourself, it might be time to find a new CEO or make the difficult decision to sell.”
Keep tabs on your exhaustion/passion scale. While it’s normal to occasionally teeter between the two, prolonged exhaustion at the expense of passion means that you’re no longer the right person to be running the business.
2. Your Lifestyle is Changing
Life changes over time. It’s not uncommon for someone to start a business when they’re young, single, and energetic. Then they get older, start a family, and feel the weight of dozens of new responsibilities. When lifestyle factors change, selling a business becomes something to consider.
Take owning a FedEx delivery route as an example. This is a highly profitable business, but as the owner get older, the hours and physical demands of the job become too much. At this point, selling the FedEx route makes sense.
The same goes for a business where you’re doing a lot of travel and sales calls. This is fine when you’re young, but traveling for five days out of the week when you have a spouse and young children is tough. Selling the business could lead to a happier and healthier family.
3. The Company’s Value is Peaking
It’s always smart to have a target sale price in mind. You don’t have to share this number with anyone else, but it’s good to have in the back of your mind so that you know, if your business is ever valued at $X, it’s time to sell. This removes some subjectivity and makes selling your business a less emotional decision.
4. A Sale Would Fund Your Retirement
Think about your business through the context of retirement. Could the sale of your company be enough to fund your retirement? Could it help you pay off your house and eliminate debt payments? These are practical factors worth considering in further detail.
5. You Have Interested Buyers
It’s one thing to put your business up for sale and attempt to go out and find buyers. It’s another thing to have buyers approach you with interest. (Particularly if there are multiple buyers to bid against one another.) This makes the process much easier and less stressful.
If you currently have buyers expressing interest in your company, these are conversations worth exploring in further detail.
Don’t Make a Rash Decision
It’s one thing to think you should sell your business. It’s another thing to actually do it. Before pulling the trigger, make sure to seek counsel from multiple parties. You’ll likely get a mixed bag of opinions, but you’ll discover the answer on how to proceed so you can live a life of greater meaning and purpose.
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