Although you love running your own business, has it ever crossed your mind: What if I sell my ... [+]
You love running your own profitable business, so this question might have never crossed your mind: Why sell my business?
It might seem daunting, but selling your business isn't just about cashing out. It's about growth. It's about evolving as an entrepreneur and, most importantly, as a person.
Why Owners Don't Sell A Profitable Business
Small business owners don't know they can sell their business. They believe that exiting is not an option for them, so they just close the doors when they feel done. This fact, along with worries about not knowing what is involved in preparing and selling a small business, can stop them from even thinking about selling. Knowing that selling is available and can be a good decision is very important. It's about understanding why, when, and how selling is the best way to find new adventures for you.
Investment writer The Finance Ghost points out that there is at least one major lesson from corporate mergers and acquisitions that can be taken on board by all small business owners: the value of exit planning. Top corporate leaders see businesses as a portfolio of opportunities. Although founders may only have one business in this portfolio, seeing it as part of a larger life plan and business journey is a helpful way to make less emotive decisions.
3 Reasons To Sell Your Business
Reason 1: You're Ready for Your Next Big Thing
Eager to start something new? Looking for the thrill of a different project? Selling your business when you're at your peak means transitioning while you're still full of energy and ideas. On top of that, selling your business can generate the needed capital for launching a new venture, or just enjoying life.
“At times, starting a new business from scratch may be easier than attempting to re-structure an existing one,” Georgi Todorov, CEO of Createandgrow.com, adds.
Reason 2: Life’s Throwing You Curveballs
You might decide to sell your business due to expected or unexpected life events, like health issues, personal challenges, or burn-out. It's essential to recognize the impact these events have on your business. Selling then becomes a step towards your self-care.
“Stuff happens! The key is to be ‘Exit-Ready’ all the time, so that if you need to sell quickly, or someone offers to buy you out of the blue, you’re not scrambling and stressed,” Leona Watson, founder and former CEO of Cheeky Food Events and current CEO of Leona Speaks, says.
Reason 3: You’re Just Not Feeling It Anymore
Do you dread another team meeting? Remember, you pursued this business not because of HR issues, but for the joy of creating something. So if your passion is fading, or your business is struggling, that's a clear sign. Selling before things go downhill can prevent financial loss and you feeling stressed all day every day.
“To be honest, this is the worst time to sell your business. You want to sell your business when you don’t have to. If you are burnt out or the business has stalled, you really lose all leverage,” Nathan Hirsch, Founder of Trioseo.com, Outsourceschool.com, Ecombalance.com, Accountsbalance.com, NathanHirsch.com, says.
The Hurdle You Face When Thinking of Selling
Not knowing, and the fear that comes with that, is human and significantly influences our decisions. These feelings are natural, but they can cloud your judgment and prevent you from seeing the opportunities in selling. Whether you're concerned about how to find a buyer, how much your business is worth, if your business is even sellable, or what happens after you exit, these questions can be daunting and your biggest hurdle to one day sell your business.
“In such an emotive journey, objectivity is key to a good outcome. Figuring out your exit price, along with getting a realistic view of where you are on that journey, is so important,” notes Graham Stephen, CEO and co-founder of bizval.
The Way Forward: Educate Yourself
Where to find a buyer, how much is my business worth, and is my business even sellable? Facing these questions head-on takes away that fear of the unknown and empowers you to move forward. The preparation of your business for an exit can feel complex and stressful, but remember: knowledge is power and having time is what makes you sell for maximum value.
“I tried to sell once when the business was on the decline and it was a disaster. But the process itself rejuvenated my passion and 3 years later the business was exit-ready. It was time to go and I could move ahead with a successful sale and with focus, fun, and energy for the next step,” Leona Watson says.
The more you know now about how to make your business sellable, how to maximize its value, what makes it attractive to buyers, and what’s involved in the selling process, the better decisions you'll make for your future.
Let’s Be Honest About What’s Really Holding You Back
Fear of the unknown can easily be handled by educating yourself on all things exiting. The more you know, the better your strategic decisions will be. But learning to prepare and sell your business for maximum value is only one side of the coin. The other side is the emotional journey you are going through when thinking about selling your business. Here are 4 common feelings I see my clients experiencing:
Guilt: Am I letting my team down?
It's normal to feel guilty when you think about selling your business. You've put so much time and effort into growing your business and you might be worried about what will happen to your employees.
“For me, my employees were just as ready for a change as myself, so it forced us all to look outwards. On the other hand, the new buyers wanted to keep my team, which is usually the case,” Leona Watson adds.
Worry: Will my customers still get good service?
You might be worried about what will happen to your business after you sell. Will my team like the new owner? Will my customers still get the same level of service? Will the company culture I’ve worked so hard to build survive?
Fear of losing your identity: Who will I be after I sell?
The uncertainty of the future can be scary, especially if you've invested a lot of time and energy into your business. Your business might feel like a big part of who you are, and stepping away from it can feel like you're losing part of your identity.
“My identity was definitely tied to my business for the first 14 years…and it wasn’t helpful! When I started to separate my feelings of personal success and failure from the business, I became a better leader and a calmer, more organized person ready to sell. You are NOT your business. But geez, we certainly feel that way at times,” Leona Watson says.
Wondering who you could be after you sell? Read my Forbes article on How To Start Angel Investing, which is a journey that brings great joy and purpose to exited founders.
Regret: Am I making the right decision to sell?
You might question, “Am I making the right decision?” But it’s important to remember that feeling regret is a normal part of dealing with change. Always remember why you decided to get your business exit-ready in the first place.
Life After Selling her Online Business: A Success Story
After years of growing her wellness business, one of my clients decided it was time to move on. I remember her saying: “I’m over this business. My interests have changed and I’ve moved on.”
Despite the fear and uncertainty, she found that understanding what made her business sellable and valuable enabled her to reflect on her journey, appreciate her achievements, and reignite her passion for entrepreneurship.
“When I exited, everyone was eagerly asking me “what next?” But I was ready to have nothing on my runway for a year. I highly recommend giving yourself the time to reflect and mull over your next step. Your energy shifts once you’re not managing a business day to day. You’re not the same person who started the company. You’re a different leader too. Maybe you don’t want another business at all. Taking a breather helps you decide and to uncover what’s been drowning in responsibility, so take the time if you can,” Leona Watson says.
Your Challenge
Reflect on your journey and what selling might mean for you. Is it a door closing, or a gateway to new possibilities? Write down fears that come up and hold you back when you think about selling and getting your business exit-ready.
What are the opportunities waiting for you on the other side of those fears? Change leads to new paths of freedom and success.
Whether you’re thinking about selling now or in the future, it’s not just about ending one chapter; it's about the promise of the next one.
