How do you know if you are ready to sell your business?
Selling a business is not a light decision. Do you know why you are selling? Are you prepared for the consequences of selling? Are you ready to sell?
Take some time to examine these questions and make sure you are ready to sell your business for good reasons at a good time.
Are you moving away from something bad or towards something good?
These are the two most common motivators for change of any kind. When it comes to selling a business, be wary if the first applies – it may mean neither you nor your business are ready for sale.
Business isn’t as good as I’d hoped.
If you are still passionate about the business this is not a good reason to sell. Get some coaching in areas that are letting you down. Speak to market experts. Try and find a way to ride out the lull. Consider that if you decide to sell and then instigate changes to make your business more appealing to buyers (with an adviser or business coach), you may then regret the decision, once the business is firing again.
I don’t care about the business any more.
Is it because it is no longer challenging? Can you expand, rebrand or reinvent? If the business is active and healthy and you have moved on in your own interests and professional develepment, this is a fair reason to sell.
I can’t keep up with the demands of the business’.
This may be because you are tired and burnt out. In which case, a good business coach may be able to help. Or it may be because you run more than one business or site and you simply can’t keep up. In which case, selling might be a very positive step.
I am moving onto other challenges.
This is a forward looking motivation and can be a good reason to sell. You will still need to take care that your business is in a good shape to sell. And perhaps ask yourself if there is a way
to keep it running without you. So you keep it as an asset without all of the responsibility.
I am ready to retire.
This is a common reason to sell. Most buyers are most trusting of ‘retirement sales’, especially if the business is in excellent shape. Make sure you are ready for the challenges of retirement and that your decision is not premature, nor motivated by external pressure (from family for example).
I need the money.
This is a rarely a good reason to sell. The sale of a healthy business will bring anywhere between 1 to 7 years cashflow as profit to you. While this might deliver a lump sum, it still will not make you as much money as continuing to run the business. And once you are out, it can be difficult to get back in.
What is next for you?
If you have other successful ventures up and running that selling your business will give you more time for, then this is probably an exciting time for you.
If you are selling a business to start a new business, consider that you may face the same things again that are motivating you to sell now. Without the existing goodwill and security of your established business.
Moving from being a business owner to an employee or even a contractor is a big change. Are you prepared to have someone else as your boss? To have a fixed salary (this may be appealing!)? Or for the combined flexibility and uncertainty that comes with freelance life?
It pays to take some time to plan out your ‘what next’. Selling a business is a big step, especially if it has taken the bulk of your time and energy for a number of years. The change can be liberating but also unsettling so ensure you have a plan in place and good support around you.
If you have any doubt, a consultation with a good business coach or adviser is a good idea. Contact us for expert, thorough and intelligent advice and appraisal about where your business is at and where you want it to go.