As a business owner, how many times have you contemplated selling your business? Unfortunately, most owners think their only options are to sell the business at retirement or liquidate the assets when times are tough.
However, it’s important to note that you have more options than you might think. Consider that someone out there may want to buy your business, even if you aren’t ready to retire and even if you aren’t turning the kind of profit you hoped for.
Here are a few things to consider as you decide how to move forward with your business in your current season of life.
How to know when it’s time to sell.
Knowing when the time is right to sell can be a challenging endeavor. It may seem easier to hold out until retirement, even if your heart isn’t in it anymore or your profits are slipping.
Here are a few questions you can ask yourself if you’re getting the feeling that it might be time to part ways with your business:
Is running your company adding value to your life or taking away from it?
Are you feeling burned out or bored?
Is your business still growing, or is revenue on the decline?
Do you have other ideas and ventures that are taking up more time than your main company?
Is your industry expanding or declining?
To get a complete picture, be sure to review your financials. If the risks of continuing to run a business that isn’t turning a profit outweigh the rewards of being a business owner, it may be time to seek an interested buyer for your company.
The benefits of selling your business.
When you begin to consider the best exit from your business, keep in mind that there are numerous benefits to selling rather than liquidating or simply closing the doors. These benefits include:
Financial support. Selling your business can provide you with the financial assistance you need to pay off any debts, recover some of your costs, or fund your next endeavor.
Reduced risk and responsibility. Running a business can be risky, taking up your time, energy, and attention. Selling it can relieve you of these responsibilities and mitigate risks that come from running a business that isn’t profitable.
A way out. If revenue is declining and profits are shrinking, selling your business can be your most profitable option to change course or get out of business ownership.
An opportunity to stay on board. If you’re interested in slowly transitioning your business to new ownership or even staying on as an employee, selling is your best option to make this happen.
Selling your business is the route that can offer you the most options. It allows you to establish your future on your terms and lets you determine how best to utilize the profits from the sale.
Selling even when profits are declining.
Many business owners aren’t aware that a business with declining profits can still be sold. Even if your business isn’t currently turning a profit, it can still be of value to a potential buyer. Value can be found in inventory, real estate location, software, and client lists.
Before selling your business in this state, however, be sure to consider the following:
Focus on your company’s strengths.
Emphasize intangible assets.
Investigate how your lease or real estate property can be beneficial to buyers.
Have your financials in order, as due diligence is a large part of a successful sale.
If you’re considering selling your business with a downturn in profits, be sure to consult with an experienced business broker before doing so. They will be able to give you an accurate assessment of value and highlight your company’s benefits to potential buyers.
Make a plan.
Finding the right buyer for your business can open doors for possibilities you hadn’t otherwise considered. If the burden of continuing to run your company is becoming too much, there’s no time like the present to start creating an exit plan for the sale of your business.
Start by asking yourself a few questions so you can get a better understanding of how selling can benefit you long-term:
What would you do after selling the business?
What would your life look like after your business is sold?
What does your timeline look like after the sale? Are you willing to transition ownership slowly or simply part ways after the sale is final?
Would you be willing to stay on as an employee of the business after you sell it? This can add significant stability and regular paychecks without the stress of running the business.
Having a plan and consulting with an experienced business broker can help you utilize the sale of your business to your benefit.
Need help getting started?
You don’t have to wait for retirement, and you don’t have to close your doors to part ways with your business. You can seek out an interested buyer at any stage of the ownership process to give yourself the most options. Contact us today to start your selling journey.