Running a business has its ups and downs. Like with many other aspects of your life, it's not uncommon to have a change in heart/motivation when it comes to running your business. Serial entrepreneurs like the aspect of owning a business but often sell their businesses in order to gain a better profit or pursue another venture. It's very similar to changing jobs or careers.
If you feel you are ready for a change when it comes to your business and professional career, you might want to consider selling your business. Here are five key signs that will indicate it's time to sell your business.
1. The 'Right' Offer Has Come Along
This can be a huge motivation to sell your business. If you have put in the hard work and effort to build your business up from the ground and you suddenly decide you want to try something different, having a valuable business can provide you with that freedom along with plenty of cash. Depending on how valuable your business is, you could receive plenty of high offers since you've already proven its success.
Lizanne Falsetto, former owner of ThinkThin products, did this by selling her company for $200 million. Falsetto was a former model and the inspiration for the popular ThinkThin energy bars came from her desire for a healthy and energizing snack while traveling to and from modeling gigs. The company came from such humble beginnings and now a new owner can take her brand and continue to grow it. As for Falsetto, she made enough money on that deal to allow the average family to retire and then some.
2. You've Taken Your Business as Far as You Can
Sometimes a plateau in terms of growth is inevitable. Maybe you have a limited skill set or met all the goals you set for your business.
Instead of pivoting and trying a new business model or re-branding, you might want to sell your business in severe cases in order to feel fulfilled again. There is nothing wrong with going a different route if you feel stuck. As we age and grow, we develop different interests and a different perspective.
If you feel you've taken your business as far as you can and you'd like to sell it, make sure you have a leadership team you can trust and rely on to provide a smooth transition to the new owner.
3. You Have Nothing Left to Invest
Eight out of 10 businesses fail for various reasons. Failure is a natural part of life and a failed business can also be viewed as a change in direction if you want to go after another professional venture.
While it's important to put your all into your business, it's also important to be cautious when your business requires more than that. Taking out debt to continue to run your business is a risky move. If you are cutting into your life savings or your retirement fund to keep your business going and you are second guessing whether or not the investment will be worth it, it may be a sign that you should consider selling your business instead in order to keep it going.
It's nearly impossible to run a business if you don't have any money to invest in its growth.
If you are wanting to continue running your business but need proper financing, consider a small business loan to get back on your feet.
4. The Market Is Shifting
The market changes constantly. What's in demand today might not be in demand tomorrow. Take MySpace for instance. For a few years, it was the top social networking site, but it has since collapsed and dramatically dropped in value.
Tom Anderson, the founder of MySpace, sold the company to Rupert Murdoch's News Corporation for $580 million back in 2005. Now he travels the world and has enough money to live off for the rest of his life if he uses it wisely. Like many savvy business owners, Tom saw that the market was changing and decided to sell his company at the peak of its performance level so he could gain a ton of profit.
5. Lack of Motivation
Everyone gets tired. Business owners burn out just like traditional employees. From the outside looking in, it can seem like entrepreneurs are living the dream since they can create their own schedules and work as often or as little as they like.
Running a business can add a lot of pressure and stress to your life. Being in charge of everything can get overwhelming and sometimes, you'll wind up having 60 to 80-hour work weeks instead of just 40. If you lose motivation long-term, your business will plummet. This is why it's best to be honest when you start losing motivation and view it as a sign. If you can't bounce back, you might have to sell your business and move on to the next thing.
Selling your business is a tough decision and it can only be made by you. These five warning signs may serve as red flags at one time or another. Ultimately, it's your decision whether you should break up with your business and sell it.