Your business is your baby as a business owner. Your business is not only your income source, but it could also be your identity and your entire life. It isn’t easy to think about selling your baby, especially now. So you wait.
Many business owners will think about selling when it’s too late. This can lead to frustration and a feeling of regret.
Many business owners believe their family or key employees will take over the business. Unfortunately, many family members don’t want the company. The business owner is left to consider a plan b.
Even if you have a key employee or family member purchasing the business, you must decide when the transfer will occur. The decision is often made when the owner wants to stop working for the company. This may seem natural, but it can provide the best value for your business.
Waiting until you can no longer do it might be the worst thing for your business. Here’s why. You start to lose love with the company when you stop putting all your effort into it. The firm is not operating at its peak, and the owner can relax and enjoy the business.
Sales drop, marketing slows down, and profits and revenues fall, causing a decrease in value.
Instead of waiting until it’s too late, plan for exiting when the business is at its peak.
This is a very difficult time for business owners to sell. Imagine that you’ve built your business to run itself. The economy picks up, and you suddenly make more money than ever. Your business is at its best.
Although believing that the curve will continue rising is tempting, this is not true. The saying goes that what goes up must also come down. The business will eventually go under.
The business’s value is heavily dependent on its revenue and profit. This is the best time to sell but the most difficult time emotionally.
Talking to family and friends about selling will make them think you’re crazy. While your spouse may question your sanity, you will still love your business.
You can understand your business’s growth curve and know there is a down period after every good period. Either you can work through it or the new owner.
Unfortunately, many business owners become complacent and believe that a growth spurt like this will last forever. They then regretted it years later when an offer came in to sell their business (near peak), and they declined.
If you receive an offer and your business has grown, it is time to speak with a broker or intermediary. Ask for market trends and evaluate the industry to determine if the company is near the top.