If the enthusiasm to run your business is fading, you aren’t alone. Occasionally, business owners become detached from the ventures they’ve worked tirelessly to build. When this happens, selling the company may be the best option. Here’s how to know when to sell your business.
4 Tips to Know When to Put Your Business Up for Sale (and How to Prepare for It)
1. The Passion to Run the Business Has Faded
After the hassles associated with the startup phase, you may lose your passion for the business. This is an excellent time to sell it. If you don‘t, you risk becoming stressed about staying in an organization that no longer excites you. This may also lead to burnout, affecting your health and ability to be productive in other activities.
2. There’s an Unfavorable Market Shift
Rapid changes in technology may be a threat to your business. They impact how you do your business in significant ways. Sell the trade when new technology is unfavorable to your business model to avoid going out of business.
3. You’re Distracted
Your circumstances may not be the same now as when you started your organization. You may have begun other ventures, or you may have a family that takes most of your time. If you’re preoccupied with other activities, dispose of the business before it loses its value irredeemably.
4. You Get a Lucrative Offer
As your organization grew, you may have earned the admiration of others. Some may want to partner with you or buy your reputable business.
This may be the perfect time to sell the business, especially if you’re plateauing. But even when there’s potential for the organization to grow, put it up for sale when you get a lucrative offer.
Preparing for the Sale
To avoid prolonging the sale process of your business, take these steps as part of your exit strategy:
Conduct a Professional Business Valuation
A professional business valuation helps you know your company’s worth, strengths, weaknesses, and market position. This helps you evaluate your offers for the best deal.
Once you settle on a buyer, prepare to make a good first impression by having organized paperwork and being professional. Follow the law throughout the sale process.
Organize and Update Your Books
The law requires that you file your annual report to continue enjoying the right to conduct your business in your state. When preparing to sell your business, you may need to alter the company name and address, membership, and shareholders. Capture these changes in your annual report to avoid penalties or losing your business licenses.
Identify a Buyer
You can rely on a broker or negotiate the sale yourself. If you have a good reputation, you may attract the best buyers. Besides looking at the monetary offer from a potential buyer, do due diligence to qualify potential buyers.
Get a Good Deal for Your Business
Consider selling your business when you’re no longer interested in building it or if the market has shifted to your disadvantage. Being distracted or getting a lucrative deal are other reasons to sell your business. Prepare for the sale by doing a valuation, organizing and updating business records, and finding a buyer.
Contact Leading Edge Business Brokers to access a pool of over 6,000 vetted business buyers.