Owning a business means being responsible for everything – from generating leads, paying taxes and making sure your employees are happy at work. When do you know it's time to sell your business?
Sign #1: Your Business Has Outgrown You
You hired well; your people are outperforming. They have dreams and goals for where they want to take the business. You’re trying to reign them in because you’re happy with an entity that plods along and earns you a decent wage. New clients and opportunities are coming in, but they don’t excite you anymore.
If you simply don’t have the ambition to take it where it’s capable of going, this is a huge sign that you should sell.
Sign #2: You've Outgrown Your Business
If you’ve been running your company for a while, you know it inside out. No problem can surprise you; no news can throw you off course.
While this level of mastery is impressive, it might also be destructive. You secretly enjoy a bit of turmoil because it makes things interesting. Kicking back and taking your eye off the ball while exploring other options is tempting, but it might not work out. Your core business could start to go backwards, and you lose the cash cow you should have sold.
Sign #3: Your Industry is Shrinking
Trends in human behavior and technology can predict the future. If the future doesn’t involve your type of business, do something now.
Analyze everything you’re doing to discern what is futureproof and what will soon be irrelevant. Shrinking businesses aren’t attractive to buyers so turning it around should be addressed first. Assess the situation, make a plan, and reimagine the part you play within the modern world. You might just fall back in love with your company. If not, it may be time to sell your business.
Sign #4: Partnership Opportunities
If continuing alone seems like a daunting prospect, the answer could lie in a partnership or selling off a part of the business. Combining forces with a competitor or collaborator to hold a bigger slice of the pie and reduce your risks is a smart idea.
An acquisition might not be right, but a merger could hit the spot. Find a partner whose values align and whose goals for the future are solid. Swallow your pride and ask the question, you might find they feel exactly the same.
Sign #5: You're Getting Distracted
It’s a good sign it’s time to sell if your eyes are wandering. Side projects, while trendy, are often a false economy. Side hustles are often distraction traps best avoided by entrepreneurs. Make your current company the one you sell and your side project the one you put first. Exit on a high and secure a clean break before starting down another route.
About Waypoint Private Capital
Waypoint Private Capital is an investment banking firm that advises the owners and management teams of middle-market companies through critical stages of their business' life cycle. Waypoint helps business owners sell companies, buy companies, raise equity and debt capital for growth and recapitalization, and plan for a successful exit from their business.
To learn more visit waypointprivatecapital.com or call us at 608.515.3354 or 918.633.2647 and speak with a Waypoint Private Capital expert.
© 2023 Waypoint Private Capital, Inc. All Rights Reserved.