Everything has its signs. Even selling your business. There comes a time when you should vacate your business and start something new. Sometimes it can be as a result of the strategic planning or because of business model limitations.
Your exit from your business can come in various forms, including the transfer of ownership, selling the business, or, in some unfortunate cases, dissolving your business altogether.
Whatever the reason for selling your business, it is a process that you must be prepared for if you are aiming to get the most out of your business sales. As part of this preparation, you need to know the warning signs to look out for.
1. New Opportunities
New opportunities will approach most entrepreneurs, even those who seem to be doing good in business. This can come in different forms, such as a new business, a new position at a large company, or something that offers more.
Whatever the opportunity that comes your way, there’ll come a moment when you feel that you should take that opportunity as opposed to staying in your business. When that time comes, it might be a sign that it’s time to sell your business.
Otherwise, you might regret later when you realize you passed something special.
2. Burnt Out
Sometimes you no longer enjoy running your business and want to do something else. But this is normal as not all of us are meant to be lifelong entrepreneurs. Maybe you want to pursue your singing or painting career. Whatever your reason is, if you’re feeling burnt out, it might be a perfect time to sell your business.
Sometimes owning a business is not as glamorous as is often thought. Some think that entrepreneurship is all about meeting with CEOs and making payments, but the daily reality of owning and managing a business can be stressful and grueling. That’s why you can experience attrition after some time.
3. You’re Given a Good Offer
In rare cases, a company owner might not have plans to sell their business until a buyer or a business broker presents an amazing offer.
Usually, such an offer is priced far above market value for the company. And since it is rare for business owners to get such offers, many people would not let that opportunity pass.
Many reasons would make buyers give an offer to a business owner who has not shown interest in selling their business. It can be that the buyer is passionate about the type of business you’re running. They might also be competitors who want to expand by buying other businesses.
4. The Business Has Outgrown Your Skills
Most often, as your business grows, you might realize that you are no longer an asset to your company. This is usually hard for entrepreneurs to accept but some honest entrepreneurs can see it by themselves.
For instance, many business owners are excellent salespeople. But once the business hits more than $5 million or more in yearly avenue (depending on the type of business), the company starts to demand leadership beyond their skills.
It is crucial to have the field knowledge to realize this stage of your business and take appropriate steps about it. But it is important to note that you can learn and grow with your business as well.
5. Business Growth
A company experiencing growth and making profits is worth selling. Buyers and investors would want to buy businesses that are making profits. That way, there are assured of making money from the time they buy the company.
Besides, investors are willing to pay a higher amount for a business they feel has the potential to make money and keep growing. Business owners might want to take this great opportunity to sell their company for colossal money when the company is still doing well.
We’re not saying that you should be pessimistic about your company. But, there is always a probability that a growing company could stop doing well at some point. Passing the opportunity to sell your company when it’s doing well might make you regret later if the business fails.
If you feel that the growth of your company could go south one day, you should not let this one-time opportunity pass.
6. Retirement
Lastly, you may want to sell your business when planning for retirement. Perhaps you’ve spent 30 or more years of your life running your business and want money for your retirement. Selling a business can present a better way to fund your retirement.
Whether you have set aside money for retirement, selling your business can give that extra cash you need to buy a new house or pay off your mortgage.