It takes hard work and mettle to build and grow your own business. But it often takes a lot more to decide when to sell it.
So, how exactly will you know if it’s time to sell your business?
As the owner or key decision-maker of a business, this can be a tough question to answer. And while arriving at a conclusion may not be as straightforward as you want it to be, there are certain telltale indicators that will tell you that it’s time to sell it.
In this article, we’ve listed down 4 signs that might tell you that it’s time to look for an exit strategy.
1) Keeping your business no longer makes sense to you financially
We get it, the pandemic has not been easy on a lot of people, moreso the small-time entrepreneurs who bank on day-to-day traffic to their stores, whether it be online or brick and mortar.
Of course, for the first few months of lockdown, you might have been able to keep your business afloat by coming out of pocket. Now, over a year later, you might find it more difficult to sustain the expenses.
It’s a bitter pill to swallow, but your business that was once a source of income may already be depleting your savings.
When keeping your business becomes a financial leak for you, one good exercise is to review your goals and the necessary financial responsibilities you need to fulfill them. If you find that there is still a bit of wiggle room for improvement — more importantly, if you can afford such — then we encourage you to use up all possible aces up your sleeves. Otherwise, it may be time to give it up.
Actionable tip: If the numbers get a bit too overwhelming, it’s always a good idea to consult with a financial advisor.
2) Your business has evolved far beyond what you have to offer
On the far end of the spectrum, your company may have thrived in the recent years or months. While congratulations may be in order, it’s also time for a reality check: is your skill set still a match to your company?
Often, when businesses grow at breakneck speed, founders often find it challenging to adapt and grow with it. And so, as with most good entrepreneurs, it’s time to be honest with yourself. It’s not difficult to recognize a near-astronomical success for a business, but it takes a certain type of business owner to know when to call it quits because their company has snowballed into something bigger than their own capabilities.
Of course, you may be able to learn and grow with your business. If it becomes too daunting, however, then it may be time to hand over the reins to someone who can take your vision further.
3) You feel burnt out
Burnout — it happens to everybody, especially in your line of work. Somewhere between dealing with personnel and crunching the numbers, you may have already lost your drive to run your business. This is not a testament against you as an entrepreneur, of course. This may simply be a consequence of strategic planning. Regardless, what was once an enjoyable process can now only be described as daunting to you.
When you get to this stage, your thoughts may naturally fall on the immediate need to sell your company. This can, in turn, result in premature sales and improper compensation.
If this is where you are right now, there are two ways you might deal with this: you could pay more attention to your personal wellness and hope that the results trickle down to your disposition at work, or you could plan your exit strategy.
4) A better offer is on the horizon
Ok, so maybe things aren’t as bad as all previous scenarios. Maybe you’ve been offered your dream job or gotten an offer for your business.
If it’s the latter, and if this lucrative opportunity is riding on the hype of the current market, then it may be time to seriously consider the offer. Just think about it: Your business has gathered enough traction to attract a buyer without you actively finding one. You can go ahead and take this as a big pat in the back, but also as a chance to realign your vision for yourself and the company. If you consider your business as a stepping stone to financial abundance, then go ahead and take the offer. But if you have a much bigger (and actionable) plan for your company, then feel free to pursue that.
You have dedicated time and effort in building and growing your own business. So when you decide to sell it, make sure that you are justly compensated for all your hard work. To give yourself and your business the best chance in the marketplace, you might find it beneficial to work with a business broker that can help you maximize the sale.