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When it comes to selling a business, timing is everything. Selling a business is also an emotional and difficult decision for a business owner.
Selling your business is a major decision and to ensure that you get the best value, you need to choose the right time for the sale. This includes assessing your personal situation and surveying the market to choose the optimal time for sale.
Moreover, the factors to sell your business also decide the methods of business valuation for investors and other stakeholders.
Here are a few factors that can help you decide if it is the right time to sell your business.
- Business has Outgrown your Skillset
Business growth is great, but also comes with its challenges. Some people excel at managing small or mid-sized businesses with a basic management structure. If your business outgrows your skill sets, it may be wise to consider selling your business or attracting an investor with the necessary skill sets.
- You’re No Longer Excited About Running the Business
Burnout is the most common reason for selling a business. If you no longer get excited about running your business and lack the drive it might be time to formulate an exit plan. Many business owners become burned out and lose their passion for their venture. This lack of enthusiasm can result in deterioration of business performance.
- You’re Reaching Retirement Age
Retirement is inevitable. At some point in life, a business owner has to decide to retire. If you don’t have a family member to pass the business to, it is justifiable reason for selling a business. If you are reaching retirement age and planning to sell your business, it is important to carefully plan the process to ensure you get a value that your business is truly worth.
- Your Financial Needs Have Changed
As a business owner, you carry the risk of your company’s profits and losses. The risk profile changes throughout life. When you first start your business, you may not worry much about the risk of losses. But as the financial needs change you may want to minimize the risk. Selling your company gives you the opportunity to eliminate risk.
- Can’t See a Path Forward
If you can’t see a clear path forward this might be the time to look into different opportunities. It is important to look at the bigger picture and decide what path you should take. If you cannot see a clear path to success, selling your business allows you to capitalize on what you have without going into excessive amount of debt.
- You have a more Lucrative Opportunity
If you have a new business opportunity in mind or thinking about wandering to other venture. This is a sign that it is time to sell your existing business. Rather than trying to distribute your attention in multiple directions, it’s better to focus on one business. Running a successful business needs deep work and concentrated effort which is not possible when you are juggling between different responsibilities.
Conclusion:
At Kapso, we’re a leading business valuation firm assisting businesses in merger and acquisition transactions. If you are wondering whether it is the right time to sell your business, we can assist you in taking the right decision.