People don’t just sell their business voluntarily, it generally happens for good reason. A large portion of the population have a dream of running their own business and would do just about anything not to give that dream up, especially for no reason. Just like many people have wills, it is also important to create one for your business (otherwise known as an exit strategy or exit plan). This helps to give you a sense of direction and gives you a good idea of what to do if and when things go south. If at some point you realize that your business is not generating a solid profit, just isn’t getting the traction that you thought it would or if you just don’t have the passion that you once did for your industry, it might be a good idea to sell it.
There are many circumstances that may lead you to deciding to sell your business. Let’s take a look at some of the typical scenarios;
You’re Incapacitated Or Can’t Work For Some Reason
God forbid, you are severely injured in an accident, you become disabled of a terrible accident or you have a life-threatening illness, this might force you to sell your business. If you were to find yourself in such a state, you would struggle to find the time or have the mental capacity to deal with such a situation. This is a prime example of why you should know when to hold ‘em, know when to fold ‘em and always have a back-up plan or exit strategy in place.
You’re Absolutely Over Doing What You Do
You may also think that selling a business online, privately or through a broker is a good option if you just don’t have the passion for it any longer. Owning or running a business is not like a life sentence, you can always sell it and buy or build something else that works for you. Yes, it may take some time to get another venture going but it sure as hell beats being miserable for the rest of your existence. As a business person, make an executive decision as to whether things are working out, whether or not you love what you do and move forward from there. The work thing that you could do is procrastinate as this is only going to make the situation worse.
Your Business Has A Cash-Flow Conundrum
Running any kind of a business comes with a share of challenges and one of the most frequent ones is money or more to the point, cash-flow. If you begin to realize that your business has found itself in a situation where you have unresolvable financial issues or is getting close, it’s probably a good idea to ring the alarm and tighten up on the outgoings and expenses or even pack it in. Cash-flow issues can arise in instances where the business is growing at a fast rate or just never worked from the start. If your business simply started growing too fast, you could most likely find ways around this but it you have had troubles since the beginning, it’s time to kill it off or sell it off.
The Business Has Grown Beyond Your Capabilities
In many instances, the founders of a business are not the people who send it into business stardom (certainly not in Australia anyway). If you find that your business has simply outgrown you and you are struggling to keep up with it’s growth, you find yourself out of your depth or if you do not feel like you can do your business proper justice if you carry-on, cash-in while your stocks are high and business is booming.
King Kong Decides To Move In On Your Niche
Ok, so a group or individual with bottomless pockets has decided to jump into the ring and take on all of the small fish. You can A) step up your game and try to match the heavyweight pound for pound or dollar for dollar or you could B) get out while you’re still ahead. You would be better off to sell in a time like this to avoid getting into some kind of arms race without your cashed-up competition.
You Get A Ridiculous Offer
If a buyer with big pockets comes along and puts forward a proposal to buy you out at a higher figure than what your business is actually worth, you would be silly not to consider such an offer.
These are the main factors that would lead you to want to sell a business and it’s good business to have an idea as to what you would do in each type of situation. Just like creating a business plan when starting a business, you should always have a plan in place for exiting or selling a business. Even if your business is successful, there may come a time where it is the right decision to get out or sell up. Therefore, you should not be too emotionally connected to the business and make a decision that is right and that works for you on a personal and professional level.
Lucas Raby is an Internet Entrepreneur and SEO Consultant from Melbourne, Australia who works part-time helping small businesses to outrank their competitors locally. For more information about Lucas or what he does, click on his name to visit his Google Plus profile.