Did you know that nine in every ten startups eventually fail? Most companies make it up to the traction stage, but only a few become established. Understanding the cycle of a business and knowing when it’s the right time to sell it is essential.
The process of nurturing business from inception to expansion is complex. For most investors, it eventually becomes apparent that it’s better to quit than to risk more losses. In other cases, your business may have outlived the intended purposes or there are underlying lifestyle issues.
Whatever the reason, knowing when to sell a business can be the defining factor for any investor. Are you wondering, “How can I go about selling my company?” This article offers you advice on when to sell a business.
When Is the Right Time to Sell a Business?
It’s hard to set an actual timeline on the perfect time to sell a business. However, as a business owner, there are tale-tell signs that should inform you that it’s time. Timing is a crucial variable when passing on your company and often determines the proceeds from the sale.
There are primary considerations that apply when deciding on when to sell your business. Before making that final decision to sell off your business, you need to ask yourself a few critical questions.
Is Your Business Your Main Passion?
If you still love what you’re currently doing, you may need to take time to think about your decision. It may not be time yet to sell that business if it gives you fulfillment. You only need to sell off your business if you want to make a complete turnaround to your life.
Is the Market-Facing Unprecedented Economic Downturn?
The value of your business correlates with the underlying fluctuations in the broader national or global economy. There are periods during a financial cycle when selling your business will only lead to losses. The caveat is always not to sell during seasons of economic downturn.
The good thing about economic downturns is that they’re temporal. If you need to sell that business, consider waiting until after such economic downturns.
However, the best time for any business owner to consider selling off their venture is during periods of financial stability.
Have You Attained Your Set Goals?
Not everybody is in business for the long haul. If your business was only supposed to serve a specific purpose over a certain period, then you only need to review your scorecard. If, after the assessment, you are comfortable that the goals you set at inception have been achieved, then it’s time to close up shop.
Most of the businesses tend to outlive their useful purpose due to the lack of a clear end goal. What drove you into the current market? Most people will mention the money aspect, but there’s often more to business than the profits.
Was your intended reason for setting up the business to see you through to retirement? Then once you hit your sunset years, you may be justified to call it quits. For most companies, continuity into the next generation is hard.
It might make more sense to sell such a business rather than risk the collapse of a venture you struggled to build. But before selling your business, consider the long-time effect in the case you let the company continue in operation.
Are Seasons Suitable?
Most businesses depend on specific seasons to thrive. If you have been in the HVAC industry, for example, you probably know by now that seasons matter. The time of the years should determine when to sell your HVAC business. For instance, during summer, there’s often more demand for HVAC service than the available supply.
For any buyer hoping to buy your HVAC company, the summer may also mean more traffic due to the overwhelming demand. While most people assume the opposite, peak periods may not be the best time to sell your company.
The best option would be to focus on making as much revenue as possible during summer, which is a peak season. This means that you can then focus on selling your HVAC business during fall without having to bow to pressure. Buyers also prefer making transitions during slower months.
If you are wondering when the best time to sell your business is, getting the seasons right can be a significant factor. You can learn more about when to sell your HVAC business here and ensure you get the best out of the transition.
If Your Health Is No Longer Tenable
Most businesses have a sole founder. This can be a blessing and a curse when looking at the future of your company. Every venture starts as a going concern, which means that there’s a clear focus on the future.
The only problem with having a sole founder is the limits of continuity. When health becomes a significant obstacle to normal life, it may be time to sell your business. You want to ensure that you get the best out of this venture.
Consequently, it may be essential to know when it’s time to bow out. This is primarily so if health issues emerge. Such lifestyle-related reasons may be abrupt, considering that health complications are unprecedented.
If You Become Tired of the Business
Getting sick and tired of your business is not an exception. Most people give up on their ventures before the second year of operations due to burnout. This may be a result of varying factors, including a shift in passion or general fatigue.
Does your business still offer you the fulfillment it did when you started? Well, diminishing passion and focus on the venture can lead to a downward spiral. If you are growing increasingly tired and fed up with the current business, it may be time to consider selling it.
This Is How to Know That You Are Ready for the Next Phase
Letting go of a business that you have helped build through sweat and blood isn’t easy. But when the time finally comes, you need to be sure that the decision you intend to make is the best.
Have you been wondering when the right time is to sell a business? This guide can help you make the best decisions when selling a company.
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