One of the hardest questions for a business owner to ask is “When is the Right Time to Sell My Business?” While there are many aspects to consider, it will ultimately come down to whether or not the owner is comfortable owning that business anymore. Every business has the point at which it no longer fits in with the plans of its current owner; it is at that point the owner needs to sell the business. Fortunately, it is relatively easy to determine that point.
As Part of a Larger Strategy
Some business owners create and nurture businesses solely to sell them later on. Leveraging a business for greater profit can be a thrill in and of itself, especially if that business was performing poorly when it was acquired. While this may take some time and financial investment, the challenge can be well worth it, especially if there is some sort of special challenge involved in nurturing the business. Given the potential for any business, the investment can be risky but sometimes well worth the risk.
The owner is going to need to look for signs when the business is ready to be sold. Ideally, this is when the business is self-sustaining, has been taken as far as it can be, and is running very nicely in terms of profit. The owner must begin the process of extracting himself from the business and make sure that the business has impressive numbers. If applicable, reviews need to be as positive as possible, and the reputation of the business must be outstanding for the Best Sale.
It No Longer Makes Sense in the Portfolio
Some owners tend to collect specific types of business or try to avoid other types of businesses. Part of running a business is that sometimes it needs to change its nature over time; the business model changes to fit the times or the business itself may change its nature. For example, a burger restaurant may change into a sushi restaurant, or the neighborhood around a business may change from a posh borough to a rundown neighborhood.
Sometimes the reputation of a business may take a hit and it is simply no longer desirable.In these situations, it may be difficult to unload the business, especially if the reputation or location has changed. While it makes sense to sell the business, it can be difficult to sell it; the owner is going to have to find a spin that makes it desirable for a new owner. It can only help if the location is still making a profit, but the history of the location, its central location, or even a good floor plan can help sell it. The owner just needs to find an advantage and advertise that in order to liquidate the business in question.
The Business Is No Longer Profitable
Some businesses hit a limit and then quickly begin spiraling downward. Sometimes it is just a bad match between owner and business, sometimes it is just a business in the wrong place at the wrong time, but the business is just unlikely to turn a profit. Rather than continuing to invest money into it, the owner may choose to sell the business rather than close it down. While most non-profitable businesses will be sold for parts or even the location, it is not uncommon for a business to be sold while it is still in business, especially if the business is making some profit.
The Owner Just No Longer Wants The Business
Some business owners just hit a point where they no longer want to be in business. This may just be because the owner wants to retire, wants to start a new business, or has no more interest in the business. This is pretty standard; the owner is tired of the business and decides to move on. The biggest problem is that the owner needs to make sure that they still sell the business for a reasonable price; too often those trying to get away from a business sell the business well below the market price. It can help to have a broker for the business in these situations, especially if the owner has some sort of emotional attachment to the business.
There are a number of points where a business owner may decide it is time to sell a business. Once the business reaches the point, sell it as quickly as possible. Do this to avoid the potential of changing his mind, and a broker may need to be retained. Ultimately, it is for the best to sell the business as quickly as the owner feels the point has been reached for the benefit of all those involved. Now you know When The Right Time To Sell your Business is.