If you are thinking of selling your business, sit yourself down and ponder the following questions. The answers may help you find the right direction...
1) Are you energized or exhausted?
Remember those heady days, when your business was young and you leapt out of bed in the morning raring to get stuck in?
Ok, that may seem like a lifetime ago, and the honeymoon period doesn’t really last that long.
Running a business is, for the most part, hard graft.
But as long as you are making a good living and enjoying what you do, it’s generally worth the work.
If, however, you feel negative when you think about your business and it’s hard to find the impetus to carry on, it may be time to consider selling up.
All too often, business owners allow their disenchantment to permeate their work practices for too long and end up with an under-performing enterprise that will be harder to sell and worth less.
"When your motivation is low, your commitment, determination and passion are tested. You become aware that your worthwhile goal will remain just that, unless you get motivated and stay motivated to achieve it."
Caroline Jalango, Life Coach, Forbes.com
It is vital, if you want to sell your business well, to shake off any malaise and be sure that A) it’s the best thing to do and B) you can put your best energies into the sale.
2) Would investing a little more help?
It’s commonly accepted that it’s best to sell your business when it’s on the up. Buyers are looking for healthy profit and sales trends, good gross profit margins, continuing customer annuities and no financial skeletons in the closet. They will obviously pay a lot more if these factors are in place.
Of course, we live in the real world where difficult circumstances can hinder our best laid plans.
When you get to a point where you are struggling and considering selling, ask yourself whether investing a little more in your business will get it to a place where it’s more saleable.
You will need to conduct a rigorous cost-benefit analysis. Added investment can be very dangerous if the money is not well spent and could leave you in a worse position.
However, if you can afford the time on a personal level, to spruce up your business and spend the money effectively, you may be a lot better off in the long run.
It’s also worth considering whether bringing in outside management or merging with a bigger company could solve your current issues.
That being said, it’s also important to know when to quit.
‘If the business is borrowing money constantly from any available source just to fund company losses, it’s time to shut the doors. In most businesses, when the current liabilities become more than 200 percent of current assets, it is too difficult to recover’ says Barry Moltz, author of How to Get Unstuck: 25 ways to get your business growing again for Americanexpress.com
3) Have you defined your goals?
Whatever your reasons for selling, and whatever state your business is in, it’s important to see your business sale as a project and to have clear aims for the deal you want to achieve.
If you are selling up to move on to another exciting business venture that’s great, but if your reasons are retirement, illness, stress, boredom or financial difficulty remember that your buyer will still want an encouraging perspective on your business.
‘How attractive a sale will be depends entirely on the context of what else is happening in your space, in your company and in your personal life’ says Kate Harrison for Forbes.com.
Never under-estimate the power of spin. If you go into the negotiating room with clear aims, an honest and positive attitude and armed with suggestions for growth, you are putting yourself in the best position possible.
4) What do you want to accomplish next?
Whether it's just time to call it a day and you're dead set on enjoying retirement, or you have some exciting new plans on the horizon, it's helpful to have an idea of what you plan to do next.
If you don't get excited about what's to come, it may well be a sign that you're not ready to sell just yet.
"If you can't think of anything you really want to do more, perhaps it's not the time to sell your business," says John Rampton, founder of online invoicing business, Due.
Murray Newlands, founder of software company, Sighted, told Inc, "You want to determine if it's the right time in your own career and in the industry to sell. It's important to have a valid reason beyond 'I need to cash out for the money."
Reflecting on her own experiences, she said: "when I've sold businesses, it's been hard because I was so emotionally invested in the companies, but I was also excited about a new idea I wanted to explore."
Are you ready to sell? You are just 10 minutes away from advertising your business to 1.3 million prospective buyers. Why not sell your business today?