You’ve worked hard on building your business for years, but there comes a time when it might not be the right way of life for you anymore. Business owners sell up for a variety of different reasons whether you have decided that you want to retire, want to be able to spend more time with your family or are considering starting over with a new business in a different industry. Understanding your motivation for starting this new chapter in your life is an important step towards getting the buyer, price and terms that you want when you finally sell up.
Knowing when it’s the right time to sell your business and move on is not always easy, but in most cases, it comes from a variety of both business and personal reasons that will be unique to you. Here are some common signs that it might be time to consider selling your company.
Looming retirement is one of the most common reasons for selling a business. If you’ve been working on your company for decades, built up your nest egg and have reached a point where you simply want to sit back and enjoy the fruits of your labour from now on, you’re probably considering selling. Many business owners who retire might feel like they could go on for longer if needed, but running a business can be exhausting - so if you’ve got the means to retire early, there’s no reason why you shouldn’t.
Has your business taken over your life completely? If you’ve forgotten the last time you were able to spend some quality time with your kids or go on a date night with your spouse, it might be time to consider selling up if you don’t want to hire somebody to run your business for you. This will give you some time to spend with the people who mean the most to you. This situation is often driven home for some business owners when they realise that they are on the brink of losing their marriage or think about how much they have missed out on with their children while working. Your passion and enthusiasm for running a business might have been put down to second place in your other life priorities at this point, and selling gives you a chance to quit working so hard and focus on your other life goals.
Entrepreneurs often find starting a new business exciting and very natural to them. However, as your business grows and develops, you may have found that you’re becoming more and more burdened with all the everyday tasks like managing HR, IT upgrades, employee health and safety, marketing and more. At this point, perhaps you feel like you have taken your business as far as you can on your own, and want to experience the excitement and thrill of starting another company from the ground up. If you prefer starting new businesses to running them, there’s no reason why you shouldn’t consider having this business valuer assess how much your company is worth. WA Business Valuations offers a comprehensive service to help you better understand how much your business is worth and put you in a better position for selling. Working with a good business valuer at the start will help you make better decisions throughout the sale process.
Starting and running a business is an exciting prospect, but it shouldn’t have a hugely detrimental effect on your mental health. But with many business owners working far more hours than average compared to employees, it’s no surprise that many entrepreneurs are driven to sell by the exhaustion and stress that they are under. While there are several things that you can do to prevent yourself from getting burned out as a business owner and put your health first, you may have gotten to a point where you’re so exhausted and stressed, that the fun of your career has completely disappeared.
Burning out can lead to a range of symptoms like tiredness, being short-tempered, or losing the ability to focus - all of which can seriously impact the relationships that you have with your team and your ability to make the best decisions for your company. If you’ve had enough, it might be time to sell up and enjoy the fruits of your labour.
Sometimes your business will need a big change in order for it to grow and move forward. If you feel like your business is stuck in a plateau and has been for some time, new owners and management might be just the ticket to getting it to where you’d like it to be. It can be frustrating as a business owner to realise that you cannot take your company any further, but sometimes, letting something go is the best decision that you can make overall. Naturally, many business owners will want to try and get the company moving forward again before they think about selling it; however, this will require further large investments, usually from further borrowing. It’s typically best to sell before things get worse.
Personal financial exposure is another very common reason for facilitating a business sale. When the growth curve demands even further investment, many business owners are pushed too far out of their own comfort zones and end up reaching a natural point where it is better to convert the equity into a financial return and pass the risks onto a new owner. There are several ways to deal with this situation - some of which do not involve selling the business completely. For example, bringing in an investor that gives current owners the option of remaining on the board as minority shareholders can solve this issue while allowing you to continue having some say in how your business is run without the added financial risks.
Private equity funds, acquisitive corporations and interested potential buyers do not tend to simply wait until you are ready to put your business up for sale. If you have had a lot of interest from companies and individuals who want to potentially buy your business, it could be worth taking them up on the offer - especially if you have noticed any of the other signs that it’s time to sell. If you are consistently being approached by interested parties who would like to purchase your business and feeling increasingly inclined to sell it to them for any of the above reasons, it’s certainly a sign that it’s a good time to consider selling.
Many business owners don’t start their company with the intention of selling it on in the future. But running a business is very different to simply starting one, and you may have noticed that it has begun to negatively impact your work-life balance, mental health, relationships or even your personal finances. If you’ve started to notice any of the above situations in your business or personal life, it could be a good time to consider selling your company on and enjoying the financial return that you have worked hard for.