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In this blog post, we will provide an ultimate guide to selling your business, including expert tips and strategies
You started your company from the ground up. You had an idea, a skill, or expertise that enabled you to succeed and create something you're proud of. You've given people jobs and helped them succeed, but you're getting a nagging feeling that it's time to move on.
In this day and age, the question "Should I sell my business?" is all too common. Many Baby Boomers started businesses over the years, and now many of those same people are looking to sell those businesses.
But it's not just Baby Boomers looking to sell their businesses. Many young entrepreneurs have taken their businesses as far as they can and are looking to exit gracefully.
By far the most common reason for people wanting to sell their business is retirement. They reach a certain age and want to unwind. It's understandable that they'd want to take a break after decades of pouring their energy, resources, and time into building a company. These individuals, in particular are ready to retire and have no children who are eager to take over the business.
Instead of letting their legacy die, they decide to sell the company to someone who will oversee it and ensure the well-being of their employees.
It's also possible that the owner is simply seeking new opportunities. You’ll hear the words “serial entrepreneur” bandied about quite a bit in and for good reason – people often just want a change. They've gotten as far as they can with their current venture, and they have a new idea they'd like to test. After all, Elon Musk is best known for his work with Tesla, but he's also been known to gaze at the stars and burrow underground.
The point is that it's very common for someone to start a business, grow it, and then sell it before moving on to a new project. If you identify as this type of entrepreneur, please contact us to learn more about how we can assist you with your next business acquisition.
Sometimes people just want a change of scenery. Perhaps they are tired of dealing with the cold or the weather is too hot. They may desire to relocate to a different economic environment and begin a new venture.
It's also common for business owners to relocate for family reasons. Maybe their spouse gets a great job opportunity in another state or their child gets accepted into a prestigious prep school.
Changes in health can also be a strong motivator to sell a business. Often, business owners reach an age where they can no longer handle the physical labor. If there is no one available to pick up the slack, the business may suffer. This may prompt them to begin looking for a buyer for the company.
Owners or family members may also be struck by unexpected illnesses, forcing them to redirect their attention and resources. It's possible that a relative becomes ill and the owner must relocate quickly to care for them.
In other cases, the owner has no intention of selling their business. That is, until they receive an enticing offer and realize that the benefits of selling outweigh the overall cost of keeping the business running.
To determine whether a deal is worth considering, the owner must weigh the offer against the current returns and the projected amount they will earn in the future.
Nobody will argue that running a business is an easy task. It is frequently characterized by stress, late nights, and long hours. However, it also provides a level of freedom not found anywhere else.
It is common for owners to take more risks in the early stages of a business because they do not have much value in their companies to lose. When they take risks, they reap greater rewards and grow faster.
However, as the company grows in size, its value rises. This frequently leads to owners becoming more conservative in their business practices. They risk losing what made them successful in the first place if they make too many changes. Furthermore, older owners become more risk-averse because they simply do not have the time to correct the ship if it deviates too far from its intended course.
Whatever the circumstances are, you should proceed with caution. You don't want to sell your company and later regret it. Similarly, you don't want to invest in a company that will go bankrupt in a year.
When you have a pre-planned exit strategy, you can often avoid stress. Perhaps you already know what conditions must be met before you consider selling your business. However, not everyone has this level of foresight. If you don't already have an exit strategy in place, make sure to carefully consider your options - look at your business plan, consider any potential offers, and consult with those closest to you.
If you've carefully considered your options and determined that you're ready to sell, your journey isn't over. There are several steps you must take to prepare your company for sale. Take into account the following factors:
You will also need to set a price for your company. Knowing how much your company is worth will help you get a good deal. However, be wary of arguing over a few dollars in valuation. Make sure to consider the quality of the person who will be purchasing the company. After all, you want to ensure that your legacy is preserved and that your people are cared for.
The best advice is to have an exit strategy in place and be ready to pursue it when your company reaches its peak value or when life tells you it's time to sell.
Whatever reasons you may have for selling your business, while there may be benefits, there could be some disadvantages to consider.
Choosing to sell your business may result in the following advantages:
There could be potential challenges to selling your business, these may include:
At Jordensky, we are committed to providing an experience of the highest caliber while specializing in accounting, taxes, MIS, and CFO services for startups and expanding businesses.
When you work with Jordensky, you get a team of finance experts who take the finance work off your plate– ”so you can focus on your business.
Also Read,
The Ultimate Checklist- How Should Business Financial Projections Be Made?
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