Sometimes, you have no option but to put an end to your business. It could be either a healthy exit strategy or due to external circumstances. You could transfer the ownership to someone else or fully wind it down according to what the situation demands. Whatever you choose to do, it’s important to know if it is right time to sell your business.
Here are some signs that tell you that this might be the right time to pull the plug and sell your business.
1. Changes to the Market
Today, the business landscape fluctuates all the time, and you often see drastic changes in the market and business environment. You may have started your business after thoroughly studying every aspect of the market and prospects. However, things can change, sometime rapidly. You should continually monitor all factors that affect your business, both positively and negatively.
It’s important to know when even the slightest market changes that could blow up soon and be unfavourable for your business. That, in turn, gives you enough time to exit gracefully before more damage occurs. If you want to sell your business, you’ll get the best price if you sell it in as strong as position as possible.
2. Dwindling Revenue
Businesses are conducted primarily for profit and money. Therefore, a considerable and consistent reduction in revenue is a strong reason for you to sell your business. However, you should closely analyse the situation and find out the actual reason for the lowered income. You may be able to turn things around. If not, or if your situation won’t be helped by a change of strategy, it may be time to wind things up before it is too late.
When you can’t find funds for conducting the basic maintenance procedures, performing routine tests and industrial inspections, and renewing regulatory licenses, it is time you gave serious thought to closing or selling your business. In some cases, you could live for months with the money you need to keep your business alive for a month. So, it would be better to make an exit strategy before you go entirely penniless.
3. Business Growth is More Than You Can Handle
You start a business with whatever you have in hand. You may not be aiming to build up a large company. When you are successful enough, sometimes the business grows beyond those limits, making it hard to handle things with the resources you have.
In some cases, if you can accommodate this growth, you’ll have a larger business bringing in a more profit in no time. However, if you suffer from want of resources and funds to support the growth, or you are not interested in managing a business of a larger size, you could do well by selling it, and maybe start a new one that suits you better.
4. Loss of Enthusiasm
You might have started your business at a young age with a lot of passion, according to your core values and beliefs at the time. However, your perceptions could change with time, and you might feel the same at a later stage in life and your interest in carrying on may wane.
In this situation, it’s probably time to move on. Perhaps it may be bringing in a decent income, but you may be wasting your precious time and energy, which you could use to start a new venture according to your current interests and outlook.
5. Lucrative Acquisition Offers
You may be doing so well that large companies come forward and offer to buy your business for an unimaginable sum. In such a situation, it’s often prudent to sell it and embark on another project. A large company, with its unlimited funds and ideas, could take your business to a new level. You will also be happy to receive a lucrative payment, which your business could not bring in for years.
Retirement is another reason why you may wish to put an end to your business activities. You may not have enough passion, energy, or health to continue your business as you get older. If you have built up a reputation for your business, you may be ruining it by continuing to run it when you’re ready to retire. Winding up or transferring the ownership can help you make your exit when you are still at your best.
When it comes to selling your business, you need to make a prudent decision at the right time. Otherwise, instead of you making the decision, it will be decided for you, and you will simply have to accept it. You should decide to sell your business not because of negative situations, but for better prospects. Whether it is due to a lack of sufficient revenue, a change of interest, or a change in market conditions, you have to make a sensible decision. Then you can look forward to a better future with great prospects!