Should You Sell Your Business? 4 Steps To Find Out
Whether you should sell your business is a tricky thing. You might believe that it is the opportune time, but is it really?
That’s what we’re about to explore in this guide. It looks at some of the steps you need to take to figure out whether it is time to sell your business and what you need to do afterwards.
Think About Your Personal Why
You’ll want to start by thinking about your personal “why”. Everyone has a reason for selling their business, so you’ll have one, too.
Sometimes, it can be as simple as just wanting to get the money. However, it can also be because you’re looking to do something else or you need the money for something.
Once you have a personal “why” nailed down, that’s when you can really start to fly. You know what you’re doing and why you’re going in a specific direction.
Assess Your Business’s Health
The next step is to look at the health of your business to figure out whether anyone is going to be willing to buy it. You want to put it in as sellable state as possible.
The good news is that you can usually make a business more likely to sell by introducing various tweaks and additional concepts. For example, you could focus more on customers and ensure that they can get the service that they want.
Or you could switch to a recurring revenue model that generates more income. There are just so many little things that you can do that can make an enormous difference overall to the profitability and desirability of the firm.
Get A Realistic Valuation
Next, you’ll want to use a business valuation calculator to see what your firm is worth. These take things like EBITDA, revenue, and assets into account before providing you with a final amount.
Again, you’ll want to focus on these metrics the most as they are the ones that can move the needle in your favor. For example, the higher a buyer thinks future profits will be, the more likely they are to make the purchase.
If you can hire a business appraiser, that’s also a good idea. They can tell you how much they think the company will sell for.
Think About Regrets
Finally, you’ll want to think carefully about regret. While this sounds strange, it is something that a lot of business leaders experience once they leave their companies.
For example, suppose you’re in a growing industry and you think that your company or brand will be worth more in the future. Are you ready to forgo 10x gains for a smaller sum of money today.
Meanwhile, if you hold onto your business for longer than necessary, you could keep working hard, burn out, and make yourself sick. That’s no fun at all.
Look at all the angles you can before you come to a decision. See what’s going to fit best with your personality and life priorities and then run with it.
