Most business owners ignore these... until it's too late.
If you are like most business owners, you've occasionally found yourself wondering what your life would be like without the stress and hassles inherent to business ownership.
Perhaps you are facing personal challenges, such as divorce, a death in the family,or other issues that need your full attention.
Maybe you have health concerns that prevent you from engaging in your business as fully as you would like.
Or, it could just be that you are ready to try something new, go back to school, buy a home in the islands, or devote more time to a hobby or interest that you've had on the back burner for far too long.
Whatever reason you have for contemplating the sale of your successful business,you must understand that selling a business is a process for which you can fully prepare.
The first place to start in those preparations is to recognize some of the warning signs that let you know it is time to plan your exit.
- Life changes are causing you to lose focus. It's difficult enough to run a successful business without the added stress of unforeseen life events. Situations such as divorce, illness of a family member, or the need to care for elderly parents can upset any work/life balance you think you have achieved. If you feel overwhelmed and depleted trying to focus on both the business and family matters, you might seriously consider selling.
- You have a hard time getting up in the morning and going to your workplace. Everyone in business experiences episodic burnout. However, if you have a regular pattern of looking for any excuse not to go to the office, it might be time to sell. Forcing yourself on a daily basis to engage with your business can have a negative impact on your financial, physical, and mental well-being. Your attitude can wind up costing you lots of money, time, and effort.
- You spend a lot more time thinking about retirement than you do about your company. There's no shame in doing this. Many of us look forward to a life without work. However, spending inordinate amounts of time watching the travel channels on television and visiting trip planning websites might point to your deep-down desire to get on with the rest of your life.
- Your kids don't want, or are incapable of running, your business. Even if your children or other family members have worked with you in the business for years, this doesn't mean that they necessarily want to take it over when you leave. As badly as you may want the company to stay in the family, you can't make assumptions. Junior may love working with customers at your pool company during the summer, but he might very well have bigger plans for his life. Even more painful to contemplate is the fact that your chosen successors might not be capable of running the business, even if they want to do so.
- Everything has grown stale and you've run out of ideas to keep things moving. Years ago, when you started the business, creative thoughts spewed out of your brain with the speed and intensity of a high pressure hose. You had tons of ideas about how to differentiate your business and make your brand unforgettable. These days though, you feel stuck and the idea well is bone dry. Without improvements and innovations, your company's growth will stagnate. If you can't re-ignite the idea machine, it could very well mean that it is time to sell.
- You need to pour tons of money into updating your business. If you are in a highly competitive niche that is continuously evolving, you might find that you've fallen behind and need to do an extensive (and expensive makeover) in order to stay profitable. Even if you are currently making a nice income, it might not be in your best interest to spend money to stay in business, especially if you aren't having fun with it anymore.
- You get an offer you'd be foolish to refuse. This happens more than you might think, even during a down economy. Someone out there has his or her eye on your business and they like what they see. Out of the blue, they make you an offer that is considerably more than current valuation. In most of these situations, it would be crazy not to sell.
- Interest rates are lower than ever before. I am writing this article in 2014, a time when interest rates are historically low. There has never been a better time to leverage other peoples' money. For investors, it makes sense to borrow like crazy and snatch up any and every appreciable asset they can, especially companies which, if managed properly, will generate nice returns.
- You have an opportunity to participate in another venture. Most business owners, even those who are only marginally successful, are constantly approached by purveyors of new "business opportunities." These can range from hyped-up multi-level marketing positions to Ponzi schemes to legitimate investment opportunities. I am sure you've probably been approached by more than your fair share of people pitching these kinds of things. However, once in a while a really good opportunity manages to come your way. Maybe it's a chance to partner with another successful entrepreneur in your local area or it's a start-up with amazing potential. When you find something like this and your gut feeling is that you want to be in on the action, then it might be time to sell your existing business and try something new.
It is never too soon to plan for the eventual sale of your business, especially if any of these warning signals sounds familiar to you.
As the starting point for planning your exit, seek out real business experts who, unlike the majority of business brokers, have actually bought and sold businesses.
Such experts will help you gain an understanding of the business selling cycle from A-Z and learn methods to avoid common pitfalls associated with the process.
I believe that the greatest legacy you can leave to your family is a company that you have converted into a money-creating machine, protected by design against erosive elements such as taxes and inflation that threaten to consume your wealth.
Consulting with experts enables you to do just that by showing you exactly how to design a custom plan that lets you to sell your business, get cash flow for life and pay no taxes.
Imagine how much peace of mind you would gain by incorporating this kind of proven business exit plan into your business- before you need it.
Successful business transitions don't come about by accident. They are the result of painstaking planning under the guidance of seasoned business professionals who know how to get the job accomplished with outcomes more favorable both to sellers and buyers.
Savvy business owners realize that the complexities of selling a business are many and that it makes sense to partner with people who have been in the trenches.