The process of selling your business is seldom straightforward. Beyond evaluating market conditions, it’s important to analyze your business assets and drawbacks, as well as your individual circumstances, when deciding if a business sale is right for you. So, what would be a reason to sell your business? Here are eight indicators that selling may be the best course of action.
You’re Ready to Retire
The decision to retire is a valid justification for selling your business. When there isn’t a successor in place, selling might be the best option. While many retirees wish to remain somewhat engaged in work activities, the level of commitment differs significantly from independently managing a business.
After dedicating considerable effort throughout your lifetime, transitioning into retirement signifies a well-deserved period of relaxation. You should reflect on how running a business impacts your well-being. If your passion for it persists, then extending your involvement may be appealing. Conversely, if feelings of fatigue and apprehension predominate, it might be time to pursue new ventures.
Your Business Is Self-Sustaining
Potential buyers evaluate various scenarios and conditions when shopping for a business. However, sellers typically secure the best asking price when their businesses can operate profitably without their direct involvement. An autonomously functioning business holds greater appeal to prospective buyers because they can invest financially without the need for active participation.
Your Business Is Doing Well
While it may seem counterintuitive, the optimal moment to sell a business is when it’s in optimal financial health. Put simply, the highest returns are typically achieved when the business is at its peak profitability. If you are nearing retirement age and the business is on an upward trajectory, you might want to proceed with a sale, recognizing that buyers seek companies poised for growth and prosperity.
Furthermore, even if retirement isn’t imminent, you may choose to sell the business to secure your financial future while remaining actively involved in its operations. Working alongside a new owner to facilitate succession and business growth can be a gratifying experience, allowing for a gradual transition into retirement rather than an abrupt shift from full-time work to an empty schedule. In this scenario, any subsequent economic downturn or decline in business performance no longer poses a risk to your original investment.
Your Business Has Surpassed You
Maybe you started as a small business and made excellent hiring decisions. Now your team is exceeding your expectations, driving the business forward in ways you hadn’t anticipated. They possess aspirations and ambitions for the company’s direction, which you find uncertain. You’re attempting to keep them grounded because you’re content with a business model that operates steadily and provides income. When there’s a misalignment of objectives, or if you lack the drive to propel it to its full potential, it’s a clear indicator that small business owners should consider selling.
You’ve Outgrown Your Business
After running a company for an extended period, you’re likely familiar with every aspect of it. You’ve encountered every obstacle, and no challenge catches you off guard. While reaching this level of proficiency is commendable, it may not bring you the satisfaction you seek. You might be bored and yearn for fresh challenges. When all the peaks have been conquered, it may be time to consider the sales process.
Your Attention Is Drifting
While side projects may seem appealing, they often prove to be a deceptive use of resources. Splitting your focus rarely yields worthwhile results and pursuing multiple objectives can lead to achieving none. Focus is essential for reaching a state of flow, where the magic of business operation truly happens. If your attention is drifting towards other endeavors, it’s a signal to think about selling your primary venture.
You’re Burnt Out
For owners who have taken proactive measures to address burnout and yet find it persisting, selling their small businesses can provide the opportunity and freedom to pursue more fulfilling endeavors. Generally, selling a business before burnout reaches its zenith is advisable. Declining interest and motivation can negatively affect a business, complicating the selling process.
You Can’t Bear Risk Anymore
As owner of a company, you shoulder the responsibility for the company’s financial statements. While this can result in significant success, it might also mean earning a lower income compared to working for someone else.
Most individuals’ tolerance for risk evolves over time. Initially, you might be comfortable with a tight budget and relatively unconcerned with potential losses. However, as your financial obligations shift and retirement approaches, you may seek to mitigate risk. In certain instances, selling your business becomes the most effective means of reducing risk within your financial portfolio.
Work With a Business Broker like Brentwood Growth to Sell Your Home Service or Facility Management Business
If any of the reasons above compel you to sell your business, Brentwood Growth’s experienced business brokers can navigate you through the process.
It all begins with a business valuation, offering business owners a comprehensive assessment of their company’s current value. As you prepare to sell your lawn care company, this valuation becomes a crucial tool for determining the timeline of your business sale, whether it’s imminent or further down the road.
Recognizing that selling a business is a significant decision, our commitment as business brokers covers the entire selling process. From accurately positioning the valuation, to assisting you in crafting your purchase agreement, through the due diligence process and ultimately facilitating the close of the deal, our dedicated team is here to support you every step of the way.
Contact us today for a complimentary business valuation.