Starting and owning a small business can be very exciting, but it can also be very difficult. From hiring new employees, to raising capital to providing excellent service, it can be difficult to juggle the multitude of responsibilities that come with owning your own business.
Often times, small businesses excel initially because they are able to provide a lot of focus and attention to its smaller customer base. As the number of clients grows, it can be difficult to maintain the same business model and provide the same amount of quality. Whether your business is experiencing growing pains, or it losing traction, there are times when it may be best to sell your small business.
Listed below are 3 reasons why you should consider selling your small business.
The Market is Right
The acquisition market for different sectors begins to heat up periodically. This means that certain small businesses are more appealing to larger companies for acquisition. For example, the technology sector is currently in high demand and many times large organizations will purchase smaller start-up tech companies. These larger organizations are often times willing to buy out smaller companies for more than their worth because they don’t want competition or value adding different services to their model. If the market in your industry is ripe, it may be the right time to consider selling your business.
You Want To Start Something New
Many entrepreneurs treat their small business as one of their children. They want to nourish the business as it grows and help it to become stronger and more independent. Sometimes, however, business owners can change their feelings toward their business and would prefer to move on to new opportunities. If you sell your small business, it gives you the chance to create something new again from the ground up (which is often more fun). An example of someone who did this is Elon Musk. He started Paypal as a small business and it grew massively. He sold Paypal and took that capital to start new businesses including Tesla and Space-X. While these businesses are now massive, it is a great example of how someone sold a company in order to start something new.
Stress
Owning a small business can be stressful for a number of reasons. As your business grows, so too does the responsibility associated with your small business. Other investors and stake-holders will begin to have a say in important matters. This can cause it to be difficult to get tasks done the way you want. Another reason that stress arises from owning a small business is due to all of the financial risk. If you are tired of constantly worrying about your profitability or margins, and it is impacting your personal life, it may be time to consider selling.
Overall, there are several reasons to consider selling any small business. There are obviously many circumstances when you shouldn’t, but if the timing and circumstances are right to sell, you need to have a business broker and exit plan. A business broker can help you to plan the details of your exit plan after you sell your business while also negotiating many of the logistical and financial details of the sales process.