Sometimes it can be difficult to know when to sell a business especially when you have built it up from scratch. By doing this you will have loyalty to your image, brand and employees you have that are dedicating their time and energy to you. Breaking this link can be difficult but sometimes it is actually necessary for the better good of the company, the employees or yourself. Below are some examples of when this may be necessary:
Health, Wellbeing and Motivation
Your own health and wellbeing is crucial to the success of your own business. If you are unfortunate enough to have particularly poor health and you are not adding value to the business maybe it is time to consider moving on and allowing someone else to lead the direction and strategy of the company. In addition to this, you may just have lost your mojo. Doing something you enjoy is important for your own wellbeing but it also affects the morale and motivation of your employees. If they sense that you are not motivated or driven on the strategy and success of the company it will directly impact their morale and motivation. If you are at that stage then it is definitely worth considering reflecting on your position of the business and looking for a way out.
Another Business Opportunity Presents Itself
If there is another business opportunity that comes up then requires your investment then it may be an option to consider either selling all or part of your business to get the required finances. This can be a very difficult decision as you are not only a seller but you are a buyer. Clearly a lot of homework is required here on the potential opportunity in the new business you are considering buying as if you don’t get this right then you could potentially lose everything! Make sure you research the market area, growth rates and credibility of the company you would look to invest in. Also explore additional options of potentially partly investing in the new company which may free up enough capital for you to have investments in both your original company and new venture.
If your company is not performing particularly well then this would scream “Fire sell” to potential buyers. If your company is however steady or growing then this would be attractive for potential investors. In the fire sell scenario, the investors can pick up on this immediately by pulling your previous financial records and looking at the performance history of the company. If this is poor then they will either not invest or look to purchase at a seriously reduced price. At the end of the day, if the performance is heading in the wrong direction, there is a serious risk here to potential buyers therefore this would be reflected in the price they propose for the purchase.