Unfortunately most business owners leave it too late to think about selling their business. When you actually have to sell your business becomes the most difficult time to maximise the value of your business.
It’s very good business practice to be aware of any reasons that may cause you to sell your business and to plan an exit strategy whilst the business is in good health and /or enthusiasm is high.
Planning for Retirement
Planning your retirement is a good reason for selling your business. Putting early plans in place will ensure you are well prepared financially so you minimise the tax impact and can continue to live the lifestyle you want.
Selling due to Illness
Having to sell your business because of illness – yours or someone in your family – is one of the hardest reasons and clearly you will have little or no control of the timing.
Cash Flow Issues
A lack of and a need for capital are reasons why a business owner may be forced to sell. Not having the resources and cash flow to expand and grow your business can be tough. In times like these bringing in a partner can be helpful.
Conflict with a Partner
Being in dispute with a partner is a nightmare for both of you and the business will suffer quickly through a lack of focus on its day to day operations. If the differences are irreconcilable then get on with life and look at your exit strategies.
It’s Just Time to Move On
Being self-employed and owning a business can be demanding and you may find yourself working more hours than ever before. The dream of the better lifestyle may become a distant memory as you put 16 hours a day into your business. Your partner and family may also become vague memories and you wonder if it is all worth it. Personal time and time out with family and friends can become almost non-existent.
It this sounds like your life – you are heading for burnout and have probably had enough of the daily grind. Take a break – find someone to run the business while you have a short break or shut up shop. A couple of days can make a big difference and if you still feel the same when you get back it may be definitely be time to sell your business.
Failing in Business
There comes a time, when you have to face the facts, and be brutally honest with yourself. Nobody started out to fail but if your expectations are not turning into a reality and your business is losing, and you can’t dig your way out of it then you may have very few options and selling may be one of them.
Prepare for the Future
Before making the final decision to sell your business take time out to think about why you are selling and prepare yourself well in advance for the sale process. Failing to plan ahead can lead to a sale that you may not be entirely happy with. The last thing you want is to be in a position where you are forced to sell.
Straight talk: Selling a business is not a quick fix. Many business owners have put their business on the market simply because they need a holiday, but in reality what they need is to build a business that is not so dependent on the owner, that can be run at arms length. For more information on learning how to work on your business and not in it – Read the E-Myth by Michael Gerber.