While there are plenty reasons for and against selling your business, how do you really know that now is the time to sell? Quora for example is filled with questions about the right time to sell, waiting to sell, how to sell, etc. If you “Google” you are flooded with advice of people who share their experiences. Allegiance Capital Corporation recently released a 2 part blog series titled “52 Reasons To Sell Your Business Now”.
There are 9 reasons out of the 52 mentioned by Allegiance Capital that deserve a closer look and warrant consideration:
- “Another business you own needs capital for new technology, equipment or intelligence that will accelerate its growth exponentially.“
When you own multiple businesses it isn’t always easy to transfer money from one to another or even possible at all. You may love both ventures but if you want to create a successful company you may have to consider selling one in favor of the other. Think of it this way: Do you rather want 2 mediocre businesses that do well or do you want 1 that can be amazing.
- “You are concerned about a potential downturn in your business”
Here’s the thing. You don’t want to sell after your business has already started to decline. You want or rather need to sell when your business is climbing, nearing its peak performance and value. In the end, you want to make money. That’s the purpose of owning your business if you are honest.
- You received an offer you couldn’t refuse … one that is significantly above your company’s valuation.
You may not think about selling your business. Everything is on track and going well, you love your job, your mission and your employees. You make a steady and good income and aren’t projected to hit that peak anytime soon. Boom. You were offered twice or even three times your company’s worth. What should you do? Well, always get advice and have the offer looked at by a professional business broker. If the deal is as amazing as it sounds, take it. Take the money and either live a happy life with it or invest it in your next incredible idea. Offers like these don’t happen often, you may regret it later if you pass.
- “We are experiencing one of the strongest seller markets in the past 7 years”
It’s like the realty market, sell when your home is worth a lot. Don’t wait and hope it continues to rise. Because we have seen the market crash fast. Sell your business when the market is strong and you can expect multiple offers from interested buyers. This way you can negotiate on your terms and make the demands you want.
- “You want to change your lifestyle and have more time available to enjoy family and other interests.”
Running a business takes time. Time away from yourself, your family, yourself and your hobbies. Many business owners invest most of their time into their business because they want it to be successful. It’s difficult to walk away and go on vacation when you know your business needs your help, so you don’t do it. After a while it becomes a drain on your energy and relationships and you may feel your business is a bigger burden than you are willing to carry. Time to sell. Go recharge.
- “Your kids are not capable of running your company.”
That is an actual problem and worthy of your consideration. You may have sent them to the best schools or have faith in their abilities. But not every kid is willing or capable of taking over the family business and running it efficiently. You shouldn’t pass it on out of pride. You wouldn’t want to see it mismanaged now, right? If you want to do your kids and yourself a favor, sell the business and share the money.
- “You just plain want to retire , period.”
Do it. Sell it. Enjoy retirement.
- “You’ve lost your passion for the business – it’s just not fun anymore.”
What has once started as a passionate dream is now dreadful work. Entrepreneurship sounded more fun and you don’t feel like this is your calling anymore. You dread going to work, you become cranky and your business suffers. Sell. Find a new passion to invest in or take the money and enjoy life. You worked hard for it.
- “You (yes YOU) are getting in the way of progress.”
You are old fashioned, you don’t agree with the new marketing message, you want things to stay the same, you don’t want to invest any more money to advance the business to the next level. Step aside and let progress happen.
These are by far not the only reasons to consider selling your business but they are valid and you should consider them in depth if you own a business. Sometimes you need to sell to create something even better. While there is nothing wrong with keeping your business if everything is running smoothly, sometimes selling might be a blessing in disguise.