At some stage in your business life you will encounter the situation of whether to keep your business or sell it. This can be quite daunting for so many reasons. However, there are some rules you can go by before you make that all important decision.
In my situation it was just before the GFC that I decided that I had had enough of my business. My passion was gone, I wasn't willing to move to the US to take it to the next level, the dollar was getting stronger which was detrimental to me and I wanted a new challenge. Basically I was done. I thought I had a buyer but at the last minute they pulled out so I decided to hang on. The GFC hit and then the business wasn't as profitable as it once was. In hindsight I should have made more of an effort to sell it before the GFC but we can't turn back the clock. A few valuable lessons were learned during this time.
In my opinion, it is good to sell your business in the following circumstances.
1. Your passion is gone. When you wake up in the morning and don't want to go to work day in, day out, it's time to go.
2. Your business has reached its peak, in your eyes that is and you cannot do anymore to grow the business. If all you see is dark clouds and sales are in a downward trend, it's time to leave.
3. If you receive an incredible offer that is hard to resist, take it. You can use this money to have a well earned break and then use this money to start another business venture.
If you can help it, do not run things into the ground. Most people when they sell, neglect their business. Their stock is low, their attitude is bad, and the work area is untidy and so on. You do not want this. A potential buyer will smell fear and desperation and you will receive much less than your business is worth. If you decide to sell, you want the new owner to walk into a successful and upbeat environment. They will have their own ideas on what they can do to improve the business. Just make sure that they are excited about the prospect of buying your business. Keep marketing and stay focused, I cannot overemphasize this enough. A sale can take months to even years, so you need to carry on your business as normal as you can.
If you are unsure about selling, believe me I still was even though I didn't want it anymore, there are some other options out there.
1. If the business is still making a good profit, let someone else manage it. Tell them you will be coming in once a month and that they are responsible for everything. Give them a bonus in their salary. They will love the opportunity to step up and earn more cash.
2. Bring in a business partner. They can pay you half of what the business is worth and run the place for you. This way, you get a nice cash injection as well as keeping future profits. If after a while you just don't want to be there at all, ask your partner to buy you out completely. This is a brilliant strategy for people who just cannot let go but still want to have some share in a business.
3. If your business can be improved, please hold onto it. It is much easier to improve a business that is running than to start from scratch all over again.
I have seen many business owners sell for the wrong reason. They get bored and lose enthusiasm. Take a vacation. Sometimes that's all you need. Selling something you have created is a massive decision so you want to be sure that you are making the right one. I looked at my business as a baby as I was there from day one. It is an emotional decision so try to be as less emotional as possible if you can.
Don't ever take for granted what you have. Only sell if you really must. If I stayed open I would have eventually shut down due to the strong currency at the time. I was better selling it and getting something versus nothing.
If the dollar was weaker there is no way I would have sold it even if my passion was lagging. The weak dollar along with no passion was the last straw for me. Think carefully when you sell.
When people ask me what they should do I usually tell them the following "If you sell, be happy, you made the right decision. If you stay, be happy, you made the right decision. Don't have any regrets. Be comfortable with your decision and move on."
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