Business ownership can be tough, and always comes with risks.
You’re a business owner who’s seen almost everything, and you’re wondering if — or when — it’s time to let go, read on for some tips on how to move forward. If you are buying or selling a business, we can offer legal consultation, and walk you through the correct steps so that you can make an informed decision about the timing and nature of the sale.
How do you know that it’s time to sell?
If you’ve been in business for quite some time, and if your business has scaled and expanded, it’s only natural that you’ll want to be careful about the timing and direction when it comes to selling.
You’ll want to consider the following:
- It can take years to move through the selling process. Unless you are in for a quick sale, start preparing the accounting and paperwork at least a few months ahead of time.
- There is always going to be some level of risk involved in a sale. The key is to discover which risks you are willing to take at this juncture.
- Economic downturns may seem like a bad time to sell but aren’t always. Either way, you could still start preparing a strategy and assessing your overall risk.
- If you have a lot of debt, tackle that first.
- Get a team together which includes a broker, your accountant, and a legal expert to help guide you through the decision process, as well as the next steps.
- Put a plan in place which includes your options if you do decide to sell.
- Bear in mind that you may not need to let go of everything at once — mergers and gradual changeovers, for instance, can be feasible and valuable.
- Get clear on what type of buyer you will be looking for when the time comes.
Why would someone sell a business?
The right timing will depend on a number of factors that go well beyond the financial end of things — lifestyle, health, personal choice are all legitimate areas to consider when selling.
Here are some common reasons that people might have to sell a business.
Too Much Stress
If the business is consistently weighing on your shoulders as a risk, you’re probably taking on too much. And stress can be a killer, literally.
Someone else might be in a better position to take over even given these risks, and rebuild it into something more compatible with the current climate.
Growth and Acquisitions
Whether or not you choose to sell a business isn’t necessarily a black and white decision.
You may consider meeting somewhere in the middle, merging, or scaling to accommodate other owners, then selling your share later.
When you take a collaborative approach, you have the opportunity to innovate beyond what you think is capable, and this can add huge value.
Changing Business Goals
How have your specific business goals changed over the years? It’s only normal to have these evolve alongside the external economic climate as it changes, as well as when your life changes.
Retirement
If you’re one of the millions of Baby Boomers who are ready to start winding down, there’s no shame here. Life is short and burnout is normal — it might just be time to start your permanent vacation.
Economic Upheaval
Your industry is most likely affected by COVID-19, and this is something to consider. Government support won’t last, and re-opening can be expensive.
Unless you’re one of the lucky industries that are positively (or neutrally) affected by the pandemic, it will probably change the way you operate forever, because of new protocols from top to bottom, not to mention major supply chain disruptions.
Even if you feel you may not make the sale profit you initially forecasted, selling now could save tons of headaches in the future.
A Fresh Start
If you want to start taking a different approach to business, start something fresh and new and leave the old ways of operations behind, it’s probably well worth it to sell a business now.
As you grow, learn, and change, your business will too. Like any relationship, it’s possible to grow apart or even get burned out as you realize you have different goals and priorities.
Conflict
A business with multiple owners is likely to run into disputes on any topic.
If someone else wants out, or if you disagree on the overall direction you want the business to follow, it’s okay to step back and take a break.
Let Us Help
Making the move to sell a business could be one of the biggest steps you ever take, so don’t let it be a decision you regret.
Call 303-780-7333 or schedule an appointment for a free consultation.
Enjoyed this article? Here are three more to help you:
10 Essential Steps for Buying a Business
9 Reasons to Buy a Business Instead of Starting from Scratch
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