Key Signs It’s Time To Sell Your Business

Is it time to sell your business? When a business isn’t seeing as much growth as its owner has intended, it’s left with two choices. The first is to cease all operations and dissolve entirely, which is nothing short of heart-wrenching. No one wants to see months of hard work from a meager capital go down the drain. Businesses that go down this road simply cease to exist.

The second, which is less unfortunate than the first and more often advised, is to sell the business to someone and see if they can make it work better. The business will be taken off the owner’s hands, but they’ll get money out of the sale. The money can then be used for a different—and perhaps more successful—business venture.

Businesses need not go the way of the dodo, especially if it brims with potential. A quick look into professional advice like Michael Giannulis’s advice will say that businesses that have enjoyed consistent performance are worth being saved. Said advice also stresses the importance of having an exit strategy, much like having a new job to move to before resigning from the old one.

So when the following signs start manifesting on your business, maybe it’s about time to sell it.

1. It No Longer Sparks Joy

The first step in determining whether to sell your business is to take a page from organizing guru Marie Kondo. Does your business still spark joy?

Determined entrepreneurs will invest time and capital into nurturing their business, even as major problems like payroll and financing come into play. Stress is an inevitability in life, but it shouldn’t hold your entire life for ransom. If everyday problems start taking their toll, it’s time to consider giving the reins of your business to another.

2. The Risk is Becoming Too Great

According to the U.S. Bureau of Labor Statistics, one-fifth of new businesses fail within two years of being established. The rate increases the longer it stays active, with 45% failing within the first five years and 65% within the first 10 years. Today’s market simply changes too fast; businesses that don’t catch up only live long enough to be irrelevant.

There are ways to manage risk, but if the risks become too great, it’s a sign. It’s important for the business to be sold while the risks are still manageable. No one wants a business that will only be trumped by erratic market forces from the start.

3. A Better Opportunity Presents Itself

Selling a business doesn’t necessarily have to end on a sad note. The prospect of a more lucrative offer or partnership has always remained a possibility. The chance of that happening increases if your business has been a relatively steady performer prior to selling it.

You’ve probably heard of situations where individuals or companies missed their chance to be part of an entrepreneurial success story. For example, Decca Records missed its window for rejecting The Beatles—then an up-and-coming band—in 1962 (the band ended up going to EMI Records). Don’t turn down an opportunity now only to regret it later.

4. You’re Out of Ideas

A business owner who can’t think of anything else to improve their business may have reached the high watermark and should determine it is time to sell the business. As mentioned earlier, today’s economy is simply moving too fast. Ideas today may become obsolete tomorrow.

Insisting to continue operating the business with this state of mind is detrimental. A business owner will be prone to making bad decisions in the long term, causing the business’s profile to suffer. It will be better to hand over the reins to someone chock-full of new ideas.

5. You’re Thinking of Retirement

Suppose your business has managed to beat all the odds and last well into your 60s. At this point, your mind might be leaning toward finally hanging up your hat. The business you’ve spent your entire life working is already a success story. 

This is as good of an opportunity and time to sell the business as ever, and enjoy retirement. Businesses can lose value fast the longer you put off this decision. Besides, the money from the sale may help you afford that Caribbean cruise you’ve always wanted.

Parting Words

Selling a business may be a bitter pill to swallow, but some circumstances can deem it so. At least, you can rest easy knowing that someone will be able to think of better ways to make it work going forward. Don’t let a bad decision spell the end of an enterprise brimming with potential.  Take these items into key consideration as to when it’s time to sell your business.