Although parting ways with your business is never an easy task, it is sometimes the profitable move left to make.
Perhaps you want to sell business fast because you’re losing money, or you’ve received an irresistible offer. Whatever the case, there are vital questions that you must immediately answer before sealing any deal like:
- Is it the right time to sell?
- How much should you value your business?
- Do you have an exit plan?
If you still have doubts after answering these questions, use these eight signs to prove that it’s time to sell your business.
Loss of Focus
Losing your focus can come in different forms, which often makes it hard to notice it yourself. It usually begins with a loss of interest for anything business.
For example, you might be in a strategic plan meeting with your partners, but your mind isn’t there at all.
Stress from unavoidable life challenges such as divorce, illness, or the death of a family member, can distract you from your full potential. If you’re in such a period, you become more of a liability than an asset to the business, and it is often better to sell.
Assess whether you’ve lost your focus by:
- Taking note of the business decisions you’ve made lately
- Measuring your productivity rate (how many productive hours you put in)
- Listening to your heart, mind, and body
If all the signs point to negative, then it’s often a good time to bow out peacefully because that’s what it means to be a leader.
Change of Heart
Famous business mogul Daymond John put it this way “running a business is hard work; it requires patience, consistency, and it takes a whole other level of sacrifice to succeed big.”
It might have recently come to your attention that perhaps you lack the qualities to succeed in the business long term and if so, proceeding to sell the business is often the best move.
Aspirations change, and your intention for starting the business might have changed in the process. Maybe you had a goal of showcasing your product to the world or a dream of changing lives through your company.
When you achieve such feats, then there’s nothing keeping you from pursuing other aspirations. Staunchly follow your passion and dreams and never allow the business to tie you down and prevent you from living your best life.
Retirement Beckons
The call of retirement comes in different ways and for various reasons. You may have seen a commercial on traveling on TV, and the thought can’t get off your mind, or you get the desire the promises retirement brings.
In any case, it is often better to answer the call and sell your business to the right person who can steer it forward.
Consider early retirement only when faced with issues that require more of your attention or if you have burgeoning needs.
Use these signs to pick the best possible time to retire.
When Clear of Debt
Outstanding loans past retirement often challenge your financial muscle. With no steady income, it is stressful to clear existing debts from car loans or house mortgages.
When you’re entirely free from debt or at least have a plan to clear before retiring, you can then plan a stress-free retirement.
When You Have Health Insurance
If you have a family, it’s natural that health complications arise from time to time. If you have no steady stream of revenue, it can prove challenging to fit medical bills. Considering you’re also at a very delicate stage of your life health-wise, ensure you have access to basic health insurance before retiring.
When you have a Monetary Plan
You can only entertain the idea of retirement when the financial demands of your life are in check. Concentrating on creating a monetary plan for the next three years, for example, helps you to account for emergency expenses and decide whether you’ll need to live more minimally.
When you have Extra Engagements
Many people downgrade the impact retirement has on your lifestyle. Waking up early, sleeping late, and crazy schedules that all of a sudden halts disrupt your lifestyle.
Retirees often have to deal with a host of mental health issues due to prolonged idleness from this reduced activity. To successfully retire, always have extra activities that keep you engaged and motivated during the initial years.
Mounting Risk and Demands
Although every business venture carries a risk, others prove too insurmountable. You may find yourself between a rock and a hard place when you love the business but foresee the looming danger that might cripple or kill the company altogether.
For example, if there happens to be a possible consumer trend shift coming in your industry that may prove costly to keep up with, or a tax burden to be imposed by the government, you’ve no choice but to sell.
Selling your business fast to avert danger may often mean lowering the business value to a substantial amount that can attract investors.
If your business is a side hustle and you have a primary source of income increasing business demands may force you to pump more money from your savings. Your business then turns to liability in the long term, and in such a case, begin planning your exit strategy.
While business is about taking a risk, smart business owners only take on battles they can win.
The Offer of a Lifetime Presents Itself
The desire to sell your business can also birth from a positive light. Perhaps your small business is now gaining traction; stakeholders notice and decide to buy you out with a once in a lifetime offer. It may also be that your impact in the industry has been so significant that big brands decide to merge your skillset into their ranks.
Such offers usually exceed the business valuation and your expectations and, thus, prove hard to decline.
In any event, use these tactics to negotiate a better sale for your business.
Understand the Dynamics of the Deal
Before discussing any deals, you must first understand the intricate details that will give you an upper hand in the negotiations.
Getting to know things like leverage the other side may use to negotiate, time constraints on the deal, and other alternatives the party helps you improve your strategy.
Maintain the Talks about Long term Success
When bargaining for a better deal, it is advisable to focus on long term benefits because the best business results often depend on longevity.
Be Prepared to Walk Away
A bluff always makes a good gamble and as such, incorporating it into your negotiation strategy shows the other party that you mean business. However, if the deal turns sour, you should always walk away and look for friendlier offers.
Burnout
When you start a business, you usually are full of energy and motivation that keeps you up at night. However, as your business grows, the market demand begins to weigh heavy, and your once brilliant ideas become a shadow of their past glory; the company outgrows your skillset, while your absence begins to go unnoticed.
Such subtle signs usually indicate that you should sell as the business dynamics can take a toll on you.
Protect your health by selling the business to avoid burnout related conditions like blood pressure and diabetes.
When the deal gets closed, use the following strategies to facilitate a smooth business ownership transition.
Promote Open Communication
After you receive more than you bargained for, it is only fair that you communicate any necessary business changes that may result in loss early on. Doing this gives the current owners a chance to cushion against any aftershocks.
Set up effective channels of communication by:
- Implementing an open-door policy
- Availing integral documents
- Hosting team building activities
- Partnering with department heads
Ready the Staff
During a change of ownership, the employees are often fearful because a power shift may reduce pay or lead to eventual layoff.
If not correctly addressed, rumors of a power transition may cause distress among workers and cause some to depart for your close competitors or start a similar business.
Ready your employees by informing them early of the change in ownership and keeping them abreast of the on-going discussions. Reassuring your workers will help keep them happy and productive, thus facilitating a smooth transition.
Work closely With the New Ownership
Disappearing immediately after the exchange transaction is complete is shady and sends the wrong message to the current owners.
Instead, plan to work innately with this group of people, taking them through different aspects of the business and showing them the ropes on how to succeed. Such action proves that the business model works, and you’ll have a less stressful transition of power.
Final Thoughts
The decision to sell your business isn’t an easy one. Often you’ll have doubts over the best time to sell, the correct valuation, or the perfect exit plan.
There’s no definite way to incorporate every aspect of your behavior into your decision to shut down your business. However, take note of subtle signs like loss of focus, change of heart, retirement beckoning, mounting risks and demands, irresistible opportunities, and burnouts to finally realize that it’s time to sell a business fast.
Promote open communication, ready the staff, and work hand in hand with the new management for a successful transition.
