Owning a small business is a labor of love. In addition to investing your money, resources, blood, sweat and tears, you also invest a small part of your soul. You love it. It’s your baby — you’ve nurtured it from nothing to the success it is now. But every now and then, a thought flashes through your mind: Should I sell?
Or, maybe someone else has seen, appreciates, and is willing to pay for what you’ve done. They offer to buy you out. Should you accept?
Selling your business is a tricky endeavor. It’s tough to know when you should take the money and run. Here are a few telltale signs that it’s time to cash in your chips and call it quits. (See also: 8 Common Myths About Starting a Small Business)
You’ve become more risk averse
One of the biggest differences between a business owner and an entrepreneur is risk aversion. Business owners like to keep things steady and solid. As the business grows, business owners can grow more conservative — sometimes to a fault — to protect and preserve the value the business has gained.
However, taking chances is essential to continued growth. Once you get to the point that new opportunities invoke more fear than excitement, you may want to think about calling it quits.
When you become too conservative, you lose your edge and stunt your business’s growth. Stagnation leads to death. Before you drag your business into the ground by standing still, consider capitalizing on all your hard work by selling it for a profit.
Owning and running a business is not for the faint of heart. It sounds sexy, but behind the curtain of success is a ton of backbreaking work. And as much as you love what you do, no one wants to work that hard all of the time.
When you start to feel tired — I mean deep down in your soul tired — that’s a sign it’s time to exit stage left. Being successful brings with it a satisfaction in beating the odds and accomplishing something notable. But there is a hidden side of success that is brutal and exhausting. Running a successful business can drain your energy and sap your strength. At some point, you have to know when you have had enough and allow someone else to take over.
Exhaustion is dangerous. You don’t make the good, hard choices you used to make. You find yourself doing what’s easy, and nothing will bring your business down quicker than taking the easy way just because it’s easy. It’s better to sell and capitalize on your success, rather than lose what you worked so hard to build.
You’ve lost your drive and your passion
Running a business takes a sense of commitment and grit that is driven by passion. When you first launch a business, you are hungry for success and work day and night to achieve it. That hunger and love of what you do sustains you during lean years and propels you forward during turbulent times.
When you lose motivation and the enthusiasm just isn’t there anymore, that is a sign that it may be time for you to try something else. When you are no longer intrigued by and “into” your business, that’s the time to begin thinking more like an entrepreneur than a small-business owner. Use your energy, talent, and creativity to figure how to leverage what you’ve built and the knowledge you’ve gained.
This may be the time to groom an up-and-coming business owner and show him or her the ropes. You may not be ready to sell the business entirely, but you can allow others to buy controlling interest in the business and you can direct the choir from the back row. And when you’re ready, sell your share and move to next challenge.
You need a change or you want to do something else
Remaining committed and passionate about the same thing your entire life is difficult. As a successful business owner, your experiences will undoubtedly cause you to evolve as a person. And sometimes that change whets your appetite for something new.
If you feel the urge to strike out and do something different, go for it! Don’t allow your business — which once was your inspiration — to become your prison. Allow yourself the freedom to do something different and explore other interests. Understanding when you’ve outgrown something takes a wisdom and insight that some people lack. Trust your instincts. If you feel it’s time for a new challenge and a change of scenery, it is.
Making your decision
Deciding to sell your business is a tough call. And per the experts, the best time to sell is at the height of profitability, which is what makes the decision so much more difficult. Choosing to sell while business is good is paradoxical. On one hand, it makes sense because a prosperous business is more attractive and marketable. But on the other hand, who wants to sell when things are going great?
The easiest way to solve this dilemma is to begin with the end in mind. Start thinking about when you’ll be ready to give it up and plan for it. You may not be able to sell during your most profitable years, but you can ensure that you are in an uptick when you do put it on the market. Selling your business isn’t the end of something good. It’s the start of something better.