You made sacrifices to build your business. You’ve put your time and energy into it, and probably at least a little blood, sweat and tears, too. Growing your business may have been one of the most important chapters of your life. Someday you’ll want to move on to the next chapter, and get top dollar for what you’ve built. But with a decision as important as selling your business, how can you know that the time is right? It’s different for everyone. Here are a few signs to look out for.
Have you hit a point in your path where you’re exhausted and approaching burn out? Burn out is defined as a state of emotional, physical, and mental exhaustion. Hitting this point is not only unhealthy for you, but also for your business and financial stability. If you’re approaching this state of mind – or worse yet, already in it – then it may be time to take a step back and assess the situation. The more you deteriorate and your business deteriorates, the lower price you’ll be forced to accept.
There’s Some Market Demand
Are you being approached with unsolicited offers? Is the economy at an all-time high, with an end on the horizon? Cashing out when the economy is in a good place, or when you have an offer above the fair value of what your company is worth, is seldom a bad thing.
Business Risks are Rising
As technology constantly evolves, we’re seeing certain industries become obsolete. If you’ve noticed technology changing your industry and aren’t able to continue on the profitable path that you’ve historically been on, consider cashing out while you can get something for your company rather than struggling to fight technology and eventually closing the doors.
What do you have going on in your life? Do you have five businesses, a vast real estate portfolio that you manage yourself, and family that you’re looking to spend time with? While diversification is great, you need to be sure that you’re not overextending yourself. Being stretched thin in your responsibilities is usually a red flag that you should start to reel things in and focus on one area.
You’re Approaching Retirement
Are you thinking about retiring in the next year or two? It’s important to factor in the time to sell the company, in addition to the time the next buyer may request for training. If you sell more quickly than you anticipate and were looking to continue working for the next year or two, the vast majority of buyers would love to keep you around for an extended period of time to better transfer your knowledge or to consult.
The choices you make around selling your business are highly personal. Only you can decide what you want your next chapter to look like, but you don’t have to weigh your options alone. Are you wondering about the right next steps for you and your business? Our business valuation team is here to help. Reach out to LGA with your questions.
by Michael Abramowitz